Exhibit 10.15
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$ 29,720,713 *
LEASE AGREEMENT
(IMPROVEMENTS - BUILDINGS 1&2)
BETWEEN
BNP LEASING CORPORATION
("BNPLC")
AND
ZHONE TECHNOLOGIES, INC.
("Zhone")
August 1, 2000
(Oakland, California)
* Equals the portion of the total amounts allocated for this Buildings 1&2
Lease and the Other Leases ($70,000,000) that is attributable to the
Buildings 1&2 Improvements according to Zhone.
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[Improvements - Buildings 1&2]
TABLE OF CONTENTS
Page
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1. TERM........................................................................................................... 2
(a) Scheduled Term........................................................................................ 2
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(b) Automatic Termination as of the Buildings 1&2 Base Rent Commencement Date Resulting From an Election
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by Zhone to Terminate the Purchase Option and the Buildings 1&2 Supplemental Payment Obligation....... 2
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(c) Election by BNPLC to Terminate After an Issue 97-10 Election.......................................... 3
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(d) Election by Zhone to Terminate After Accelerating the Designated Sale Date............................ 3
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(e) Extension of the Term................................................................................. 3
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2. USE AND CONDITION OF THE PROPERTY.............................................................................. 4
(a) Use................................................................................................... 4
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(b) Condition of the Property............................................................................. 4
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(c) Consideration for and Scope of Waiver................................................................. 4
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3. RENT........................................................................................................... 5
(a) Base Rent Generally................................................................................... 5
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(b) Impact of Collateral Upon Formulas.................................................................... 5
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(c) Calculation of and Due Dates for Base Rent............................................................ 5
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(i) Xxxxxx Xxxxxxx Xx xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date.............................. 5
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(ii) Determination of Payment Due Dates, After the Buildings 1&2 Base Rent Commencement Date,
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Generally.................................................................................... 6
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(iii) Special Adjustments to Base Rent Payment Dates and Periods................................... 6
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(iv) Base Rent Formula for Periods During Which The Collateral Percentage is 100%................. 6
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(v) Base Rent Formula for Periods During Which The Collateral Percentage is Less Than 100%....... 7
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(d) Additional Rent....................................................................................... 8
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(e) Arrangement Fee....................................................................................... 8
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(f) Commitment Fees....................................................................................... 8
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(g) Administrative Agency Fees............................................................................ 9
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(h) Issue 97-10 Prepayments............................................................................... 9
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(i) No Demand or Setoff................................................................................... 9
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(j) Default Interest and Order of Application............................................................. 9
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4. NATURE OF THIS AGREEMENT....................................................................................... 10
(a) "Net" Lease Generally................................................................................. 10
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(b) No Termination........................................................................................ 10
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(c) Tax Reporting......................................................................................... 11
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(d) Characterization of this Buildings 1&2 Lease.......................................................... 11
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5. PAYMENT OF EXECUTORY COSTS AND LOSSES RELATED TO THE PROPERTY.................................................. 12
(a) Impositions........................................................................................... 12
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(b) Increased Costs; Capital Adequacy Charges............................................................. 12
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(c) Zhone's Payment of Other Losses; General Indemnification.............................................. 13
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[Improvements - Buildings 1&2]
(d) Exceptions and Qualifications to Indemnities........................................................... 15
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6. CONSTRUCTION................................................................................................... 16
(a) Construction Advances; Outstanding Construction Allowance.............................................. 16
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(b) Calculation of Carrying Costs.......................................................................... 17
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(i) Carrying Cost Formulas........................................................................ 17
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(a) Basic Carrying Costs................................................................. 17
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(b) Supplemental Carrying Costs.......................................................... 17
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(ii) Explanation of Carrying Cost Formulas/Agreement of BNPLC to Fund Additional Collateral Equal
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to Supplemental Carrying Costs
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(c) Limits on the Amount of Carrying Costs................................................................. 18
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(i) Limit Tied to Maximum Construction Allowance................................................. 18
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(ii) Limit Tied to Funding by Participants........................................................ 19
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(d) Zhone's Right to Control the Construction Project...................................................... 19
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(e) Landlord's Election to Continue Construction........................................................... 19
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(i) Take Control of the Property................................................................. 19
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(ii) Continuation of Construction................................................................. 20
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(iii) Arrange for Turnkey Construction............................................................. 20
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(iv) Suspension or Termination of Construction.................................................... 20
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(f) Powers Coupled With an Interest........................................................................ 21
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(g) Completion Notice...................................................................................... 21
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7. STATUS OF PROPERTY ACQUIRED WITH FUNDS PROVIDED BY BNPLC....................................................... 21
8. ENVIRONMENTAL.................................................................................................. 22
(a) Environmental Covenants by Zhone....................................................................... 22
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(b) Right of BNPLC to do Remedial Work Not Performed by Zhone.............................................. 22
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(c) Environmental Inspections and Reviews.................................................................. 23
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(d) Communications Regarding Environmental Matters......................................................... 23
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9. INSURANCE REQUIRED AND CONDEMNATION............................................................................ 24
(a) Liability Insurance.................................................................................... 24
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(b) Property Insurance..................................................................................... 24
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(c) Failure to Obtain Insurance............................................................................ 25
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(d) Condemnation........................................................................................... 25
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10. APPLICATION OF INSURANCE AND CONDEMNATION PROCEEDS............................................................. 25
(a) Collection and Application of Insurance and Condemnation Proceeds Generally............................ 25
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(b) Advances xx Xxxxxxxxx 0&0 Xxxxxxxx Proceeds to Zhone................................................... 26
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(c) Application of Buildings 1&2 Escrowed Proceeds as a Qualified Prepayment............................... 26
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(d) Special Provisions Applicable After Completion by Zhone of the Construction Project.................... 26
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(e) Special Provisions Applicable After a CMA Termination Event or Event of Default........................ 26
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(f) Zhone's Obligation to Restore.......................................................................... 27
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(g) Takings of All or Substantially All of the Property on or after xxx Xxxxxxxxx 0&0 Xxxx Rent
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Commencement Date...................................................................................... 27
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11. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF ZHONE CONCERNING THE PROPERTY.......................... 28
(a) Compliance with Covenants and Laws..................................................................... 28
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(b) Operation of the Property.............................................................................. 28
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(c) Debts for Construction, Maintenance, Operation or Development.......................................... 29
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[Improvements - Buildings 1&2]
(d) Repair, Maintenance, Alterations and Additions........................................................ 29
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(e) Permitted Encumbrances and Development Documents...................................................... 30
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(f) Books and Records Concerning the Property............................................................. 30
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12. FINANCIAL COVENANTS AND OTHER COVENANTS INCORPORATED BY REFERENCE TO SCHEDULE 1............................... 30
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13. FINANCIAL STATEMENTS AND OTHER REPORTS........................................................................ 30
(a) Financial Statements; Required Notices; Certificates.................................................. 30
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14. ASSIGNMENT AND SUBLETTING BY ZHONE............................................................................ 32
(a) BNPLC's Consent Required.............................................................................. 32
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(b) Standard for BNPLC's Consent to Assignments and Certain Other Matters................................. 32
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(c) Consent Not a Waiver.................................................................................. 32
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15. ASSIGNMENT BY BNPLC........................................................................................... 32
(a) Restrictions on Transfers............................................................................. 33
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(b) Effect of Permitted Transfer or other Assignment by BNPLC............................................. 33
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16. BNPLC'S RIGHT OF ACCESS....................................................................................... 33
17. EVENTS OF DEFAULT............................................................................................. 34
18. REMEDIES...................................................................................................... 36
(a) Basic Remedies........................................................................................ 36
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(b) Notice Required So Long As the Purchase Option and the Buildings 1&2 Supplemental Payment Obligation
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Continue Under xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement................................................... 37
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(c) Enforceability........................................................................................ 38
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(d) Remedies Cumulative................................................................................... 38
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19. DEFAULT BY BNPLC.............................................................................................. 38
20. QUIET ENJOYMENT............................................................................................... 38
21. SURRENDER UPON TERMINATION.................................................................................... 39
22. HOLDING OVER BY ZHONE......................................................................................... 39
23. INDEPENDENT OBLIGATIONS EVIDENCED BY THE OTHER OPERATIVE DOCUMENTS............................................ 39
24. AMENDMENT AND RESTATEMENT..................................................................................... 40
[Improvements - Buildings 1&2]
Exhibits and Schedules
Exhibit A..........................................Legal Description of the Land
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Exhibit B.................................................Insurance Requirements
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Exhibit C.............................................LIBOR Period Election Form
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Schedule 1............................Financial Covenants and Other Requirements
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[Improvements - Buildings 1&2] (v)
LEASE AGREEMENT
(IMPROVEMENTS - BUILDINGS 1&2)
This LEASE AGREEMENT (IMPROVEMENTS - BUILDINGS 1&2) (this "Buildings 1&2
Lease") is made and dated as of August 1, 2000 (the "Effective Date") by and
between BNP LEASING CORPORATION, a Delaware corporation ("BNPLC"), and ZHONE
TECHNOLOGIES, INC., a Delaware corporation ("Zhone").
RECITALS
Contemporaneously with the execution of this Buildings 1&2 Lease, BNPLC and
Zhone are executing an Common Definitions and Provisions Agreement (Improvements
- Buildings 1&2) dated as of the Effective Date (the "Buildings 1&2 CDPA"),
which by this reference is incorporated into and made a part of this Buildings
1&2 Lease for all purposes. As used in this Buildings 1&2 Lease, capitalized
terms defined in xxx Xxxxxxxxx 0&0 XXXX and not otherwise defined in this
Buildings 1&2 Lease are intended to have the respective meanings assigned to
them in xxx Xxxxxxxxx 0&0 XXXX.
Zhone and BNPLC have previously executed that Lease Agreement (Phase I -
Improvements) dated as of January 20, 2000 (the "Prior Lease Agreement"). Zhone
and BNPLC have agreed to amend, restate and replace the Prior Lease Agreement
with this Buildings 1&2 Lease and the Building 3 Lease as provided in Paragraph
24 below.
Pursuant to the Acquisition Contract, which covers the Land described in
Exhibit A, BNPLC has acquired the Land and any appurtenances thereto from
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Seller.
BNPLC and Zhone have reached agreement as to the terms and conditions upon
which BNPLC is willing to lease certain Improvements constructed or to be
constructed on the portion of the Land designated as xxx "Xxxxxxxxx 0&0 Xxxx" on
page 2 of Exhibit A (the "Buildings 1&2 Site"), and by this Buildings 1&2 Lease
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BNPLC and Zhone desire to evidence such agreement.
GRANTING CLAUSES
BNPLC does hereby LEASE, DEMISE and LET unto Zhone for the term hereinafter
set forth all right, title and interest of BNPLC, now owned or hereafter
acquired, in and to:
(1) any and all Improvements on xxx Xxxxxxxxx 0&0 Xxxx; and
(2) all easements and other rights appurtenant to the Improvements on
the Buildings 1&2 Site, whether now owned or hereafter acquired by BNPLC.
BNPLC's interest in all property described in clauses (1) and (2) above are
hereinafter referred to collectively as the "Real Property". The Real Property
does not include the Land itself, it being understood that the Land Lease
constitutes a separate lease of the Land and the appurtenances thereto, and only
the Land and the appurtenances thereto, from BNPLC to Zhone.
[Improvement - Buildings 1&2]
To the extent, but only to the extent, that assignable rights or interests
in, to or under the following have been or will be acquired by BNPLC under the
Acquisition Contract or acquired by BNPLC pursuant to Paragraph 7 below, BNPLC
also hereby grants and assigns to Zhone for the term of this Buildings 1&2 Lease
the right to use and enjoy (and, in the case of contract rights, to enforce)
such rights or interests of BNPLC:
(a) any goods, equipment, furnishings, furniture and other tangible
personal property of whatever nature that are located on the Land and all
renewals or replacements of or substitutions for any of the foregoing;
(b) the benefits, if any, conferred upon the owner of the Real
Property by the Permitted Encumbrances and Development Documents; and
(c) any permits, licenses, franchises, certificates, and other rights
and privileges against third parties related to the Real Property.
Such rights and interests of BNPLC, whether now existing or hereafter arising,
are hereinafter collectively called the "Personal Property". The Real Property
and the Personal Property are hereinafter sometimes collectively called the
"Property."
However, the leasehold estate conveyed hereby and Zhone's rights hereunder
are expressly made subject and subordinate to the terms and conditions of this
Buildings 1&2 Lease, to the Permitted Encumbrances, and to any other claims or
encumbrances not constituting Liens Removable by BNPLC.
GENERAL TERMS AND CONDITIONS
The Property is leased by BNPLC to Zhone and is accepted and is to be used
and possessed by Zhone upon and subject to the following terms and conditions:
1 Term.
(a) Scheduled Term. The term of this Buildings 1&2 Lease (the "Term")
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shall commence on and include the Effective Date, and end on the first Business
Day of August, 2005, unless sooner terminated as expressly herein provided or
extended as provided in subparagraph 1.(e).
(b) Automatic Termination as of the Buildings 1&2 Base Rent
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Commencement Date Resulting From an Election by Zhone to Terminate the Purchase
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Option and the Buildings 1&2 Supplemental Payment Obligation. If Zhone
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terminates the Purchase Option and the Buildings 1&2 Supplemental Payment
Obligation prior to xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date pursuant to
subparagraph 4(B) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement, then this Buildings
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1&2 Lease shall terminate automatically on the Buildings 1&2 Base Rent
Commencement Date. Just as any such termination of the Purchase Option and the
Buildings 1&2 Supplemental Payment Obligation shall be subject to the condition
(set forth in subparagraph 4(B) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement) that
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Zhone pay an Issue 97-10 Prepayment to BNPLC, so too will the termination of
this Buildings 1&2 Lease pursuant to this subparagraph be subject the condition
that Zhone make the Issue 97-10 Prepayment to BNPLC.
(c) Election by BNPLC to Terminate After an Issue 97-10 Election. By
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notice to Zhone BNPLC shall be entitled to terminate this Buildings 1&2 Lease,
as BNPLC deems appropriate in its sole and absolute discretion, at any time
after receiving a notice given by Zhone to make any Issue 97-10 Election. Upon
[Improvement - Buildings 1&2]
-2-
any termination of this Buildings 1&2 Lease by BNPLC pursuant to this
subparagraph, Zhone shall become obligated to pay to BNPLC an Issue 97-10
Prepayment, which obligation will survive the termination of this Buildings 1&2
Lease.
(d) Election by Zhone to Terminate After Accelerating the Designated
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Sale Date.
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Provided Zhone has not made any Issue 97-10 Election, Zhone shall be entitled to
accelerate the Designated Sale Date (and thus accelerate the purchase of BNPLC's
interest in the Property by Zhone or by an Applicable Purchaser pursuant to xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement) by sending a notice to BNPLC as provided in
clause (2) of the definition of "Designated Sale Date" in xxx Xxxxxxxxx 0&0
XXXX. In the event, because of Zhone's election to so accelerate the Designated
Sale Date or for any other reason, the Designated Sale Date occurs before the
end of the scheduled Term, Zhone may terminate this Buildings 1&2 Lease on or
after the Designated Sale Date; provided, however, as a condition to any such
termination by Zhone, Zhone must have done the following prior to the
termination:
(i) purchased or caused an Applicable Purchaser to purchase the
Property pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement and satisfied all
of Zhone's other obligations under xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement;
(ii) paid to BNPLC all Base Rent, all Commitment Fees and all other
Rent due on or before or accrued through the Designated Sale Date; and
(iii) paid any Breakage Costs caused by BNPLC's sale of the Property
pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
(e) Extension of the Term. The Term may be extended at the option of
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Zhone for two successive periods of one year each; provided, however, that prior
to any such extension the following conditions must have been satisfied: (A) at
least one hundred eighty days prior to the commencement of any such extension,
BNPLC and Zhone must have agreed in writing upon, and received the consent and
approval of BNPLC's Parent and all other Participants to (1) a corresponding
extension not only to the date for the expiration of the Term specified above in
this Section, but also to the date specified in clause (1) of the definition of
Designated Sale Date in the Buildings 1&2 CDPA, and (2) an adjustment to the
Rent that Zhone will be required to pay for the extension, it being expected
that the Rent for the extension may be different than the Rent required for the
original Term, and it being understood that the Rent for any extension must in
all events be satisfactory to both BNPLC and Zhone, each in its sole and
absolute discretion; (B) no Event of Default shall have occurred and be
continuing at the time of Zhone's exercise of its option to extend; (C) prior to
any such extension, Zhone must have completed the Construction Project in
accordance with the Buildings 1&2 CMA and must not have made any Issue 97-10
Election; and (D) immediately prior to any such extension, this Buildings 1&2
Lease must remain in effect. With respect to the condition that BNPLC and Zhone
must have agreed upon the Rent required for any extension of the Term, neither
Zhone nor BNPLC is willing to submit itself to a risk of liability or loss of
rights hereunder for being judged unreasonable. Accordingly, both Zhone and
BNPLC hereby disclaim any obligation express or implied to be reasonable in
negotiating the Rent for any such extension. Subject to the changes to the Rent
payable during any extension of the Term as provided in this Paragraph, if Zhone
exercises its option to extend the Term as provided in this Paragraph, this
Buildings 1&2 Lease shall continue in full force and effect, and the leasehold
estate hereby granted to Zhone shall continue without interruption and without
any loss of priority over other interests in or claims against the Property that
may be created or arise after the Effective Date and before the extension.
2 Use and Condition of the Property.
[Improvement - Buildings 1&2]
-3-
(a) Use. Subject to the Permitted Encumbrances, the Development
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Documents and the terms hereof, Zhone may use and occupy the Property during the
Term, but only for the following purposes and other lawful purposes incidental
thereto:
(i) construction and development of the Construction Project;
(ii) administrative and office space;
(iii) research and development, production, assembly, distribution and
warehousing, in each case of products that are of substantially the same
type and character as those regularly sold by Zhone in the ordinary course
of its business as of the Effective Date;
(iv) cafeteria, library and other support facilities that Zhone may
provide to its employees; and
(vi) other lawful purposes (including research and development or
production of products that are not of substantially the same type and
character as those regularly sold by Zhone in the ordinary course of its
business as of the Effective Date) approved in advance and in writing by
BNPLC, which approval will not be unreasonably withheld after completion of
the Construction Project (but Zhone acknowledges that BNPLC's withholding
of such approval shall be reasonable if BNPLC determines in good faith that
(1) giving the approval may materially increase BNPLC's risk of liability
for any existing or future environmental problem, or (2) giving the
approval is likely to substantially increase BNPLC's administrative burden
of complying with or monitoring Zhone's compliance with the requirements of
the Buildings 1&2 Operative Documents or the Other Operative Documents).
(b) Condition of the Property. Zhone acknowledges that it has
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carefully and fully inspected the Property and accepts the Property in its
present state, AS IS, and without any representation or warranty, express or
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implied, as to the condition of such property or as to the use which may be made
thereof. Zhone also accepts the Property without any covenant, representation or
warranty, express or implied, by BNPLC or its Affiliates regarding the title
thereto or the rights of any parties in possession of any part thereof, except
as expressly set forth in Paragraph 20. BNPLC shall not be responsible for any
latent or other defect or change of condition in the Land or in Improvements,
fixtures and personal property forming a part of the Property or for any
violations with respect thereto of Applicable Laws. Further, BNPLC shall not be
required to furnish to Zhone any facilities or services of any kind, including
water, steam, heat, gas, air conditioning, electricity, light or power.
(c) Consideration for and Scope of Waiver. The provisions of
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subparagraph 2.(b) above have been negotiated by BNPLC and Zhone after due
consideration for the Rent payable hereunder and are intended to be a complete
exclusion and negation of any representations or warranties of BNPLC or its
Affiliates, express or implied, with respect to the Property that may arise
pursuant to any law now or hereafter in effect or otherwise, except as expressly
set forth herein.
However, such exclusion of representations and warranties by BNPLC is not
intended to impair any representations or warranties made by other parties, the
benefit of which may pass to Zhone during the Term because of the definition of
Personal Property and Property above.
[Improvements - Buildings 1&2]
-4-
3 Rent.
(a) Base Rent Generally. On the Buildings 1&2 Base Rent Commencement
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Date and on each Base Rent Date through the end of the Term, Zhone shall pay
BNPLC rent ("Base Rent"). Each payment of Base Rent must be received by BNPLC no
later than 10:00 a.m. (Pacific time) on the date it becomes due; if received
after 10:00 a.m. (Pacific time) it will be considered for purposes of this
Buildings 1&2 Lease as received on the next following Business Day. At least
five days prior to any Buildings 1&2 Base Rent Commencement Date or Base Rent
Date upon which an installment of Base Rent shall become due, BNPLC shall notify
Zhone in writing of the amount of each installment, calculated as provided
below. Any failure by BNPLC to so notify Zhone, however, shall not constitute a
waiver of BNPLC's right to payment, but absent such notice Zhone shall not be in
default hereunder for any underpayment resulting therefrom if Zhone, in good
faith, reasonably estimates the payment required, makes a timely payment of the
amount so estimated and corrects any underpayment within three Business Days
after being notified by BNPLC of the underpayment.
(b) Impact of Collateral Upon Formulas. To ease the administrative
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burden of this Buildings 1&2 Lease and xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx, the
formulas for calculating Base Rent set out below in subparagraph 3.(c) reflect a
reduction in the Base Rent equal to the interest that would accrue on any
Collateral provided in accordance with the requirements of xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx from time to time if the Accounts (as defined in xxx Xxxxxxxxx
0&0 Xxxxxx Xxxxxxxxx) bore interest at the Deposit Rate. BNPLC has agreed to
such reduction to provide Zhone with the economic equivalent of interest on such
Collateral, and in return Zhone has agreed to the provisions of xxx Xxxxxxxxx
0&0 Xxxxxx Xxxxxxxxx that excuse the actual payment of interest on the Accounts.
By incorporating such reduction of Base Rent into the formulas below, and by
providing for noninterest bearing Accounts in xxx Xxxxxxxxx 0&0 Xxxxxx
Xxxxxxxxx, an unnecessary and cumbersome periodic exchange of equal payments
will be avoided. It is not, however, the intent of BNPLC or Zhone to understate
Base Rent or interest for financial reporting purposes. Accordingly, for
purposes of any financial reports that this Buildings 1&2 Lease requires of
Zhone from time to time, Zhone may report Base Rent as if there had been no such
reduction and as if the Collateral from time to time provided in accordance with
the requirements of xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx had been maintained in
Accounts bearing interest at the Deposit Rate.
(c) Calculation of and Due Dates for Base Rent. Payments of Base Rent
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shall be calculated and become due as follows:
(i) Amount Payable On the Buildings 1&2 Base Rent Commencement Date.
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The Base Rent payable on the Buildings 1&2 Base Rent Commencement Date
shall equal the difference (if any) between (a) the total amount that would
have been added to the Outstanding Construction Allowance as Carrying Costs
on such date if not for the limit set forth in subparagraph 6.(c)(i), and
(b) the Carrying Costs actually added on such date to the Outstanding
Construction Allowance, consistent with the limit set forth in subparagraph
6.(c)(i).
(ii) Determination of Payment Due Dates, After the Buildings 1&2 Base
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Rent Commencement Date, Generally. For all Base Rent Periods subject to a
---------------------------------
LIBOR Period Election of one month or three months, Base Rent shall be due
in one installment on the Base Rent Date upon which the Base Rent Period
ends. For Base Rent Periods subject to a LIBOR Period Election of six
months, Base Rent shall be payable in two installments, with the first
installment becoming due on the Base Rent Date that occurs on the first
Business Day of the third calendar month following the commencement of such
Base Rent Period, and with the second installment becoming due on the Base
Rent Date upon which the Base Rent Period ends.
[Improvements - Buildings 1&2]
-5-
(iii) Special Adjustments to Base Rent Payment Dates and Periods.
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Notwithstanding the foregoing:
(a) Any Base Rent Period that begins before, and does not
otherwise end before, the first Business Day of the first calendar
month following a Failed Collateral Test Date shall end upon but not
include such first Business Day, and such first Business Day shall
constitute a Base Rent Date, upon which Zhone must pay all accrued,
unpaid Base Rent for the Base Rent Period just ended.
(b) In addition to Base Rent due on a the first Business Day of
the first calendar month following a Failed Collateral Test Date,
Zhone must pay the Breakage Costs, if any, resulting from any early
ending of a Base Rent Period pursuant to the preceding clause
3.(c)(iii)a).
(c) If Zhone or any Applicable Purchaser purchases BNPLC's
interest in the Property pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement, any accrued unpaid Base Rent and all outstanding Additional
Rent shall be due on the date of purchase in addition to the purchase
price and other sums due BNPLC under xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement.
(iv) Base Rent Formula for Periods During Which The Collateral
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Percentage is 100%. Each installment of Base Rent payable for any Base
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Rent Period during which the Collateral Percentage is one hundred percent
(100%) shall equal:
. Stipulated Loss Value on the first day of such Base Rent Period,
times
. the sum of (a) the Secured Spread and (b) the Effective
Rate/Deposit Rate Difference for the period from and including
the preceding Base Rent Date to but not including the Base Rent
Date upon which the installment is due, times
. the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is one hundred percent
(100%); that prior to the first day of such Base Rent Period the
Construction Allowance has been fully funded, but Qualified Prepayments
have been received by BNPLC, leaving a Stipulated Loss Value of
$15,000,000; that the sum of the Secured Spread and the Effective
Rate/Deposit Rate Difference is @@forty-two and one-half basis points
(42.5/100 of 1%); and that such Base Rent Period contains exactly thirty
days. Under such assumptions, the Base Rent for the hypothetical Base Rent
Period will equal:
$15,000,000 x .425% x 30/360 = $5312.50
(v) Base Rent Formula for Periods During Which The Collateral
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Percentage is Less Than 100%. Each installment of Base Rent payable for
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any Base Rent Period during which the Collateral Percentage is less than
one hundred percent (100%) shall equal:
. Stipulated Loss Value on the first day of such Base Rent Period, times
[Improvemnts - Building 1&2]
-6-
. the sum of:
(A) the product of:
(1) the Collateral Percentage for such Base
Rent Period, times
(2) the sum of (a) the Secured Spread and
(b) the Effective Rate/Deposit Rate
Difference for the period from and
including the preceding Base Rent Date
to but not including the Base Rent Date
upon which the installment is due, plus
(B) the product of:
(1) one minus the Collateral Percentage for
such Base Rent Period, times
(2) the sum of (a) the Effective Rate with
respect to such Base Rent Period, plus
(b) the Unsecured Spread for the period
from and including the preceding Base
Rent Date to but not including the Base
Rent Date upon which the installment is
due, times
. the number of days in the period from and including the preceding
Base Rent Date to but not including the Base Rent Date upon which
the installment is due, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that the Collateral
Percentage for a hypothetical Base Rent Period is fifty percent (50%); that
prior to the first day of such Base Rent Period the Construction Allowance
has been fully funded, but Qualified Prepayments have been received by
BNPLC, leaving a Stipulated Loss Value of $15,000,000; that the Effective
Rate for the Base Rent Period is 6%; that the sum of the Secured Spread and
the Effective Rate/Deposit Rate Difference is forty-two and one-half basis
points (42.5/100 of 1%); that upon the commencement of such Base Rent
Period the Unsecured Spread is two hundred twenty-five basis points
(225/100 of 1%); and that such Base Rent Period contains exactly thirty
days. Under such assumptions, the Base Rent for the hypothetical Base Rent
Period will equal:
$15,000,000 x {(50% x .425%) + ([1 - 50%] x [6% + 2.25%])} x 30/360 = $54,218.73
(d) Additional Rent. All amounts which Zhone is required to pay to or
---------------
on behalf of BNPLC pursuant to this Buildings 1&2 Lease, together with every
charge, premium, interest and cost set forth herein which may be added for
nonpayment or late payment thereof, shall constitute rent (all such amounts,
other than Base Rent, are herein called "Additional Rent", and together Base
Rent and Additional Rent are herein sometimes called "Rent").
[Improvements - Buildings 1&2]
-7-
(e) Arrangement Fee. On the first Advance Date, an Arrangement Fee
---------------
(the "Arrangement Fee") will be paid to BNPLC from the Construction Advance made
on that date (and thus be included in Stipulated Loss Value) in the amount
provided in the letter dated as of June 19, 2000 from BNPLC to Zhone.
(f) Commitment Fees. For each Construction Period Zhone shall pay
---------------
BNPLC a fee (a "Commitment Fee") as follows:
(i) For each Construction Period ending before the first anniversary
of the Effective Date, Commitment Fees shall equal:
. the sum of:
(A) twenty basis points (20/100 of 1%), times an amount
(not less than zero) equal to:
(1) the Maximum Construction Allowance, less
(2) the Funded Construction Allowance on the
first day of such Construction Period; times
. the number of days in such Construction Period; divided by
. three hundred sixty.
(ii) For each Construction Period ending on or after the first
anniversary of the Effective Date, Commitment Fees shall equal:
. thirty basis points (30/100 of 1%), times an amount equal to:
(A) the Maximum Construction Allowance (as reduced on the
day prior to the first anniversary of the Effective Date, to the
extent required by the proviso in the definition thereof in the
Common Definitions and Provisions Agreement), less
(B) the Funded Construction Advances on the first day of
such Construction Period; times
. the number of days in such Construction Period, divided by
. three hundred sixty.
Zhone shall pay Commitment Fees in arrears on the first Business Day of January,
April, July and October of each calendar year, beginning with the first Business
Day of October, 2000 and continuing regularly throughout the Term so long as
Commitment Fees have accrued and remain unpaid. On any date upon which BNPLC's
interest in the Buildings 1&2 Property is sold pursuant to xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement, and on the effective date of any termination of this
Buildings 1&2 Lease pursuant to subparagraphs 1.(b) or 1.(c), Zhone shall pay
accrued, unpaid Commitment Fees, if any.
[Improvement - Buildings 1&2]
-8-
On the first Business Day of October, 2000, Zhone shall pay (in addition to the
Commitment Fees payable as provided above for the Construction Periods
commencing on or after the Effective Date and ending on or before the first
Business Day of October, 2000) the Commitment Fees that had accrued and remained
unpaid under the Prior Lease Agreement as of the Effective Date.
(g) Administrative Agency Fees. On the first Advance Date, an
--------------------------
administrative agency fee (an "Administrative Agency Fee") will be paid to BNPLC
from the Construction Advance made on that date (and thus be included in
Stipulated Loss Value) in the amount provided in the letter dated as of June 19,
2000 from BNPLC to Zhone. Also, on each anniversary of the Effective Date,
Zhone shall pay to BNPLC an administrative agency fee (also, an "Administrative
Agency Fee") in the amount set forth in the letter agreement dated as of June
19, 2000 from BNPLC to Zhone.
(h) Issue 97-10 Prepayments. Following any Issue 97-10 Election or any
-----------------------
CMA Termination Event under (and as defined in) xxx Xxxxxxxxx 0&0 XXX, Xxxxx
shall make an Issue 97-10 Prepayment to BNPLC within three Business Days after
receipt of any demand for such a payment. BNPLC may demand an Issue 97-10
Prepayment pursuant to this subparagraph at any time and from time to time (as
Project Costs increase) after any Issue 97-10 Election or CMA Termination Event.
(i) No Demand or Setoff. Except as expressly provided herein, Zhone
-------------------
shall pay all Rent without notice or demand and without counterclaim, deduction,
setoff or defense.
(j) Default Interest and Order of Application. All Rent shall bear
-----------------------------------------
interest, if not paid when first due, at the Default Rate in effect from time to
time from the date due until paid; provided, that nothing herein contained will
be construed as permitting the charging or collection of interest at a rate
exceeding the maximum rate permitted under Applicable Laws. BNPLC shall be
entitled to apply any amounts paid by or on behalf of Zhone against any Rent
then past due in the order the same became due or in such other order as BNPLC
may elect.
4 Nature of this Agreement.
(a) "Net" Lease Generally. Subject only to the exceptions listed in
---------------------
subparagraph 5.(d) below, it is the intention of BNPLC and Zhone that Base Rent,
the Arrangement Fees, Administrative Agency Fees, Commitment Fees and other
payments herein specified shall be absolutely net to BNPLC and that Zhone shall
pay all costs, expenses and obligations of every kind relating to the Property
or this Buildings 1&2 Lease which may arise or become due, including: (i) any
taxes payable by virtue of BNPLC's receipt of amounts paid to or on behalf of
BNPLC in accordance with Paragraph 5; (ii) any amount for which BNPLC is or
becomes liable with respect to the Permitted Encumbrances or the Development
Documents; and (iii) any costs incurred by BNPLC (including Attorneys' Fees)
because of BNPLC's acquisition or ownership of any interest in the Property or
because of this Buildings 1&2 Lease or the transactions contemplated herein.
(b) No Termination. Except as expressly provided in this Buildings 1&2
--------------
Lease itself, this Buildings 1&2 Lease shall not terminate, nor shall Zhone have
any right to terminate this Buildings 1&2 Lease, nor shall Zhone be entitled to
any abatement of the Rent, nor shall the obligations of Zhone under this
Buildings 1&2 Lease be excused, for any reason whatsoever, including any of the
following: (i) any damage to or the destruction of all or any part of the
Property from whatever cause, (ii) the taking of the Property or any portion
thereof by eminent domain or otherwise for any reason, (iii) the prohibition,
limitation or restriction of Zhone's use or development of all or any portion of
the Property or any interference with such use by governmental action or
otherwise, (iv) any eviction of Zhone or of anyone claiming through or under
Zhone, (v)
[Improvement - Buildings 1&2]
-9-
any default on the part of BNPLC under this Buildings 1&2 Lease or under any
other agreement to which BNPLC and Zhone are parties, (vi) the inadequacy in any
way whatsoever of the design, construction, assembly or installation of any
improvements, fixtures or tangible personal property included in the Property
(it being understood that BNPLC has not made, does not make and will not make
any representation express or implied as to the adequacy thereof), (vii) any
latent or other defect in the Property or any change in the condition thereof or
the existence with respect to the Property of any violations of Applicable Laws,
(viii) any breach by Seller of the Acquisition Contract or other agreements or
promises or representations made in connection with the Acquisition Contract, or
(ix) any other cause whether similar or dissimilar to the foregoing. It is the
intention of the parties hereto that the obligations of Zhone hereunder shall be
separate and independent of the covenants and agreements of BNPLC, that Base
Rent and all other sums payable by Zhone hereunder shall continue to be payable
in all events and that the obligations of Zhone hereunder shall continue
unaffected, unless the requirement to pay or perform the same shall have been
terminated or limited pursuant to an express provision of this Buildings 1&2
Lease. Without limiting the foregoing, Zhone waives to the extent permitted by
Applicable Laws, except as otherwise expressly provided herein, all rights to
which Zhone may now or hereafter be entitled by law (including any such rights
arising because of any implied "warranty of suitability" or other warranty under
Applicable Laws) (i) to quit, terminate or surrender this Buildings 1&2 Lease or
the Property or any part thereof or (ii) to any abatement, suspension, deferment
or reduction of the Rent.
However, nothing in this subparagraph 4.(b) shall be construed as a waiver
by Zhone of any right Zhone may have at law or in equity to the following
remedies, whether because of BNPLC's failure to remove a Lien Removable by BNPLC
or because of any other default by BNPLC under this Buildings 1&2 Lease that
continues beyond the period for cure provided in Paragraph 19: (i) the recovery
of monetary damages, (ii) injunctive relief in case of the violation, or
attempted or threatened violation, by BNPLC of any of the express covenants,
agreements, conditions or provisions of this Buildings 1&2 Lease which are
binding upon BNPLC (including the confidentiality provisions set forth in
subparagraph 16.(c) below), or (iii) a decree compelling performance by BNPLC of
any of the express covenants, agreements, conditions or provisions of this
Buildings 1&2 Lease which are binding upon BNPLC.
(c) Tax Reporting. BNPLC and Zhone shall report this Buildings 1&2
-------------
Lease and xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement for federal income tax purposes
as a conditional sale unless prohibited from doing so by the Internal Revenue
Service. If the Internal Revenue Service shall challenge BNPLC's
characterization of this Buildings 1&2 Lease and xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement as a conditional sale for federal income tax reporting purposes, BNPLC
shall notify Zhone in writing of such challenge and consider in good faith any
reasonable suggestions by Zhone about an appropriate response. In any event,
Zhone shall (subject only to the limitations set forth in this subparagraph)
indemnify and hold harmless BNPLC from and against all liabilities, costs,
additional taxes (other than Excluded Taxes) and other expenses that may arise
or become due because of such challenge or because of any resulting
recharacterization required by the Internal Revenue Service, including any
additional taxes that may become due upon any sale under xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement to the extent (if any) that such additional taxes are not
offset by tax savings resulting from additional depreciation deductions or other
tax benefits to BNPLC of the recharacterization. If BNPLC receives a written
notice of any challenge by the Internal Revenue Service that BNPLC believes will
be covered by this Paragraph, then BNPLC shall promptly furnish a copy of such
notice to Zhone. The failure to so provide a copy of the notice to Zhone shall
not excuse Zhone from its obligations under this Paragraph; provided, that if
none of the officers of Zhone and none of the employees of Zhone responsible for
tax matters are aware of the challenge described in the notice and such failure
by BNPLC renders unavailable defenses that Zhone might otherwise assert, or
precludes actions that Zhone might otherwise take, to minimize its obligations
hereunder, then Zhone shall be excused from its obligation to indemnify BNPLC
against liabilities, costs, additional taxes and other expenses, if any, which
would not have been incurred but for such failure. For example, if BNPLC fails
to
[Improvements - Builbings 1&2]
-10-
provide Zhone with a copy of a notice of a challenge by the Internal Revenue
Service covered by the indemnities set out in this Buildings 1&2 Lease and Zhone
is not otherwise already aware of such challenge, and if as a result of such
failure BNPLC becomes liable for penalties and interest covered by the
indemnities in excess of the penalties and interest that would have accrued if
Zhone had been promptly provided with a copy of the notice, then Zhone will be
excused from any obligation to BNPLC to pay the excess.
(d) Characterization of this Buildings 1&2 Lease. For purposes of
--------------------------------------------
determining the appropriate financial accounting for this Buildings 1&2 Lease
and for purposes of determining their respective rights and remedies under state
law, BNPLC and Zhone believe and intend that (i) this Buildings 1&2 Lease
constitutes a true lease, not a mere financing arrangement, enforceable in
accordance with its express terms, and the preceding subparagraph is not
intended to affect the enforcement of any other provisions of this Buildings 1&2
Lease or xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement, and (ii) xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement shall constitute a separate and independent contract,
enforceable in accordance with the express terms and conditions set forth
therein. In this regard, Zhone acknowledges that Zhone asked BNPLC to
participate in the transactions evidenced by this Buildings 1&2 Lease and xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement as a landlord and owner of the Property, not as
a lender. Although other transactions might have been used to accomplish similar
results, Zhone expects to receive certain material accounting and other
advantages through the use of a lease transaction. Accordingly, and
notwithstanding the reporting for income tax purposes described in the preceding
subparagraph, Zhone cannot equitably deny that this Buildings 1&2 Lease and xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement should be construed and enforced in accordance
with their respective terms, rather than as a mortgage or other security device,
in any action brought by BNPLC to enforce this Buildings 1&2 Lease or xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
5 Payment of Executory Costs and Losses Related to the Property.
(a) Impositions. Subject only to the exceptions listed in subparagraph
-----------
5.(d) below, Zhone shall pay or cause to be paid prior to delinquency all ad
valorem taxes assessed against the Property and other Impositions. If requested
by BNPLC from time to time, Zhone shall furnish BNPLC with receipts showing
payment of all Impositions prior to the applicable delinquency date therefor.
Notwithstanding the foregoing, Zhone may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
Imposition, and pending such contest Zhone shall not be deemed in default under
any of the provisions of this Buildings 1&2 Lease because of the Imposition if
(1) Zhone diligently prosecutes such contest to completion in a manner
reasonably satisfactory to BNPLC, and (2) Zhone promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all costs,
penalties and interest thereon, promptly after such judgment becomes final;
provided, however, in any event each such contest shall be concluded and the
contested Impositions must be paid by Zhone prior to the earlier of (i) the date
that any criminal prosecution is instituted or overtly threatened against BNPLC
or its directors, officers or employees because of the nonpayment thereof or
(ii) the date any writ or order is issued under which any property owned or
leased by BNPLC (including the Property) may be seized or sold or any other
action is taken against BNPLC or against any property owned or leased by BNPLC
because of the nonpayment thereof, or (iii) any Designated Sale Date upon which,
for any reason, Zhone or an Affiliate of Zhone or any Applicable Purchaser shall
not purchase BNPLC's interest in the Property pursuant to xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement for a price to BNPLC (when taken together with any additional
payments made by Zhone pursuant to Paragraph 1(A)(3) of the Buildings 1&2
-----------------
Purchase Agreement, in the case of a purchase by an Applicable Purchaser) equal
to the Buildings 1&2 Break Even Amount.
[Improvements - Buildings 1&2]
-11-
(b) Increased Costs; Capital Adequacy Charges. Subject only to the
-----------------------------------------
exceptions listed in subparagraph 5.(d) below:
(i) If after the Effective Date there shall be any increase in the
cost to BNPLC's Parent or any other Participant agreeing to make or making,
funding or maintaining advances to BNPLC in connection with the Property
because of any Banking Rules Change, then Zhone shall from time to time,
pay to BNPLC for the account of BNPLC's Parent or such other Participant,
as the case may be, additional amounts sufficient to compensate BNPLC's
Parent or the Participant for such increased cost. An increase in costs
resulting from any imposition or increase of reserve requirements
applicable to Collateral held from time to time by BNPLC's Parent or other
Participants pursuant to xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx would be an
increase covered by the preceding sentence. A certificate as to the amount
of such increased cost, submitted to BNPLC and Zhone by BNPLC's Parent or
the other Participant, shall be conclusive and binding upon Zhone, absent
clear and demonstrable error.
(ii) BNPLC's Parent or any other Participant may demand additional
payments ("Capital Adequacy Charges") if BNPLC's Parent or the other
Participant determines that any Banking Rules Change affects the amount of
capital to be maintained by it and that the amount of such capital is
increased by or based upon the existence of advances made or to be made to
BNPLC to permit BNPLC to maintain BNPLC's investment in the Property or to
make Construction Advances. To the extent that BNPLC's Parent or another
Participant demands Capital Adequacy Charges as compensation for the
additional capital requirements reasonably allocable to such investment or
advances, Zhone shall pay to BNPLC for the account of BNPLC's Parent or the
other Participant, as the case may be, the amount so demanded. Without
limiting the foregoing, BNPLC and Zhone hereby acknowledge and agree that
the provisions for calculating Base Rent set forth herein reflect the
assumption that xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx will cause a zero
percent (0%) risk weight to be assigned to a percentage (equal to the
Collateral Percentage) of the collective investment of BNPLC and the
Participants in the Property pursuant to 12 Code of Federal Regulations,
part 225, as from time to time supplemented or amended, or pursuant to any
other similar or successor statute or regulation applicable to BNPLC and
the Participants. If and so long as such risk weight is increased above
the assumed amount of zero percent (0%) because of a Banking Rules Change,
Capital Adequacy Charges may be collected to yield the same rate of return
to BNPLC, BNPLC's Parent and any other Participants (net of their costs of
maintaining required capital) that they would have enjoyed from this
Buildings 1&2 Lease absent such increase.
(iii) Notwithstanding the foregoing provisions of this subparagraph
5.(b), Zhone shall not be obligated pay any claim for compensation pursuant
to this subparagraph 5.(b) arising or accruing more than six months prior
to the date Zhone is notified that BNPLC or a Participant intends to make
the claim; provided, however, that Zhone shall not be excused by this
subparagraph from providing such compensation for any period during which
notice on behalf of BNPLC or the Participant, as the case may be, could not
be provided because of the retroactive application of the statute,
regulation or other basis for the claim.
(iv) Any amount required to be paid by Zhone under this subparagraph
5.(b) shall be due fifteen days after a notice requesting such payment is
received by Zhone.
(c) Zhone's Payment of Other Losses; General Indemnification.
--------------------------------------------------------
Subject only to the exceptions listed in subparagraph 5.(d) below:
[Improvements - Buildings 1&2]
-12-
(i) All Losses (including Environmental Losses) asserted against or
incurred or suffered by BNPLC or other Interested Parties at any time and
from time to time by reason of, in connection with or arising out of (A)
their ownership or alleged ownership of any interest in the Property or the
Rents, (B) the use and operation of the Property, (C) the negotiation,
administration or enforcement of the Buildings 1&2 Operative Documents, (D)
the making of Funding Advances, (E) the Construction Project, (F) the
breach by Zhone of this Buildings 1&2 Lease or any other document executed
by Zhone in connection herewith, (G) any failure of the Property or Zhone
itself to comply with Applicable Laws, (H) Permitted Encumbrances, (I)
Hazardous Substance Activities, including those occurring prior to
Effective Date, (J) any obligations under the Acquisition Contract (or
under any other agreement made with the City of Oakland in connection with
or pursuant to the Acquisition Contract) that survive the closing under the
Acquisition Contract, or (K) any bodily or personal injury or death or
property damage occurring in or upon or in the vicinity of the Property
through any cause whatsoever, shall be paid by Zhone, and Zhone shall
indemnify and defend BNPLC and other Interested Parties from and against
all such Losses.
(ii) THE INDEMNITIES AND RELEASES PROVIDED HEREIN FOR THE BENEFIT OF
BNPLC AND OTHER INTERESTED PARTIES, INCLUDING THE INDEMNITY SET FORTH IN
----- - -
THE PRECEDING SUBPARAGRAPH 5.(c)(i), SHALL APPLY EVEN IF AND WHEN THE
SUBJECT MATTERS OF THE INDEMNITIES AND RELEASES ARE CAUSED BY OR ARISE OUT
OF THE NEGLIGENCE OR STRICT LIABILITY OF BNPLC OR ANOTHER INTERESTED PARTY.
----- - -
FURTHER, SUCH INDEMNITIES AND RELEASES WILL APPLY EVEN IF INSURANCE
OBTAINED BY ZHONE OR REQUIRED OF ZHONE BY THIS BUILDINGS 1&2 LEASE OR OTHER
- - -
BUILDINGS 1&2 OPERATIVE DOCUMENTS IS NOT ADEQUATE TO COVER LOSSES AGAINST
- - -
OR FOR WHICH THE INDEMNITIES AND RELEASES ARE PROVIDED. ZHONE'S LIABILITY,
-
HOWEVER, FOR ANY FAILURE TO OBTAIN INSURANCE REQUIRED BY THIS BUILDINGS 1&2
LEASE OR OTHER BUILDINGS 1&2 OPERATIVE DOCUMENTS WILL NOT BE LIMITED TO
- - -
LOSSES AGAINST WHICH INDEMNITIES ARE PROVIDED HEREIN, IT BEING UNDERSTOOD
-
THAT SUCH INSURANCE IS INTENDED TO DO MORE THAN PROVIDE A SOURCE OF PAYMENT
FOR LOSSES AGAINST WHICH BNPLC AND OTHER INTERESTED PARTIES ARE ENTITLED TO
- ----- - -
INDEMNIFICATION BY THIS BUILDINGS 1&2 LEASE.
-
(iii) Costs and expenses for which Zhone shall be responsible
pursuant to this subparagraph 5.(c) will include appraisal fees, filing and
recording fees, inspection fees, survey fees, taxes, brokerage fees and
commissions, abstract fees, title policy fees, Uniform Commercial Code
search fees, escrow fees and Attorneys' Fees incurred by BNPLC with respect
to the Property, whether such costs and expenses are incurred at the time
of execution of this Buildings 1&2 Lease or at any time during the Term.
Such costs and expenses will also include Attorneys' Fees or other costs
incurred to evaluate lien releases and other information submitted by Zhone
with requests for Construction Advances.
(iv) Zhone's obligations under this subparagraph 5.(c) shall survive
the termination or expiration of this Buildings 1&2 Lease. Any amount to be
paid by Zhone under this subparagraph 5.(c) shall be due fifteen days after
a notice requesting such payment is received by Zhone.
(v) If an Interested Party notifies Zhone of any claim or
proceeding included in, or any investigation or allegation concerning,
Losses for which Zhone is responsible pursuant to this subparagraph 5.(c),
Zhone shall assume on behalf of the Interested Party and conduct with due
diligence
[Improvements - Buildings 1&2]
-13-
and in good faith the investigation and defense thereof and the response
thereto with counsel selected by Zhone, but reasonably satisfactory to the
Interested Party; provided, that the Interested Party shall have the right
to be represented by advisory counsel of its own selection and at its own
expense; and provided further, that if any such claim, proceeding,
investigation or allegation involves both Zhone and the Interested Party
and the Interested Party shall have reasonably concluded that there are
legal defenses available to it which are inconsistent with or in addition
to those available to Zhone, then the Interested Party shall have the right
to select separate counsel to participate in the investigation and defense
of and response to such claim, proceeding, investigation or allegation on
its own behalf, and Zhone shall pay or reimburse the Interested Party for
all Attorney's Fees incurred by the Interested Party because of the
selection of such separate counsel. If Zhone fails to assume promptly (and
in any event within fifteen days after being notified of the applicable
claim, proceeding, investigation or allegation) the defense of the
Interested Party, then the Interested Party may contest (or settle, with
the prior consent of Zhone, which consent will not be unreasonably
withheld) the claim, proceeding, investigation or allegation at Zhone's
expense using counsel selected by the Interested Party. Moreover, if any
such failure by Zhone continues for forty-five days or more after Zhone is
notified of any such claim, proceeding, investigation or allegation, the
Interested Party may elect not to contest or continue contesting the same
and instead, in accordance with the written advice of counsel, settle (or
pay in full) all claims related thereto without Zhone's consent and without
releasing Zhone from any obligations to the Interested Party under this
subparagraph 5.(c).
(d Exceptions and Qualifications to Indemnities.
--------------------------------------------
(i BNPLC acknowledges and agrees that nothing in subparagraph 4.(a)
or the preceding subparagraphs of this Paragraph 5 shall be construed to
require Zhone to pay or reimburse (w) any costs or expenses incurred by any
Interested Party (including BNPLC or any transferee of BNPLC) to accomplish
any Permitted Transfers described in clauses (1), (2), (3), (4) or (6) of
the definition thereof in the Buildings 1&2 CDPA, (x) Excluded Taxes, (y)
Losses incurred or suffered by any Interested Party that are proximately
caused by (and attributed by any applicable principles of comparative fault
to) the Established Misconduct of that Interested Party, or (z) Losses
incurred or suffered in connection with the execution of the Participation
Agreement or Buildings 1&2 Pledge Agreement by Participants (or supplements
making them parties thereto) or in connection with any negotiation or due
diligence Participants may undertake before entering into the Participation
Agreement or Buildings 1&2 Pledge Agreement. Further, without limiting
BNPLC's rights (as provided in other provisions of this Buildings 1&2 Lease
and other Buildings 1&2 Operative Documents) to include the following in
the calculation of the Outstanding Construction Allowance, Stipulated Loss
Value, the Buildings 1&2 Break Even Amount and the Maximum Permitted
Prepayment (as applicable) or to collect Base Rent, Issue 97-10
Prepayments, a Buildings 1&2 Supplemental Payment and other amounts, the
calculation of which depends upon the Outstanding Construction Allowance,
Stipulated Loss Value, the Buildings 1&2 Break Even Amount and the Maximum
Permitted Prepayment, BNPLC acknowledges and agrees that nothing in
subparagraph 4.(a) or the preceding subparagraphs of this Paragraph 5 shall
be construed to require Zhone to pay or reimburse an Interested Party for:
a) costs previously paid by BNPLC with the proceeds of the
Prior Funding Advances; or
b) Construction Advances, including costs and expenditures
incurred or paid by or on behalf of BNPLC after any Landlord's
Election to Continue Construction, to the extent that
-14-
such costs and expenditures are considered to be Construction Advances
pursuant to subparagraph 6.(e); or
c) any Post Closing Advance made by BNPLC as provided in the
Land Lease.
Further, if an Interested Party receives a written notice of Losses that
such Interested Party believes are covered by the indemnity in subparagraph
5.(c)(i), then such Interested Party will be expected to promptly furnish a
copy of such notice to Zhone. The failure to so provide a copy of the
notice to Zhone shall not excuse Zhone from its obligations under
subparagraph 5.(c)(i); provided, that if Zhone is unaware of the matters
described in the notice and such failure renders unavailable defenses that
Zhone might otherwise assert, or precludes actions that Zhone might
otherwise take, to minimize its obligations, then Zhone shall be excused
from its obligation to indemnify such Interested Party (and any Affiliate
of such Interested Party) against the Losses, if any, which would not have
been incurred or suffered but for such failure. For example, if BNPLC
fails to provide Zhone with a copy of a notice of an obligation covered by
the indemnity set out in subparagraph 5.(c)(i) and Zhone is not otherwise
already aware of such obligation, and if as a result of such failure BNPLC
becomes liable for penalties and interest covered by the indemnity in
excess of the penalties and interest that would have accrued if Zhone had
been promptly provided with a copy of the notice, then Zhone will be
excused from any obligation to BNPLC (or any Affiliate of BNPLC) to pay the
excess.
(ii Notwithstanding anything to the contrary in subparagraph 4.(a)
or the preceding subparagraphs of this Paragraph 5, Zhone's liability for
payments required by the preceding subparagraphs of this Paragraph 5, and
not excused by the preceding subparagraph 5.(d)(i), prior to substantial
completion of the Construction Project ("Construction-Period Indemnity
Payments") shall be subject to the following provisions:
a) Zhone may decline to pay any Construction-Period Indemnity
Payments other than the following (it being understood that Zhone's
payment of the following Construction-Period Indemnity Payments shall
not be subject to any abatement or deferral by anything contained in
this subparagraph 5.(d)(ii)):
(1 Construction-Period Indemnity Payments eligible for
reimbursement to Zhone under the terms and conditions of xxx
Xxxxxxxxx 0&0 XXX; and
(2 Construction-Period Indemnity Payments that constitute
Absolute Construction Obligations.
b) Any Construction-Period Indemnity Payment Zhone is excused
from paying by this subparagraph 5.(d)(ii), together with interest
thereon at the Default Rate, will be included in the calculation of
the Buildings 1&2 Break Even Amount under (and as defined in) xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
6. Construction.
(a Construction Advances; Outstanding Construction Allowance. The
---------------------------------------------------------
Buildings 1&2 CMA entitles Zhone to receive from BNPLC - subject to the terms
and conditions set forth in the Buildings 1&2 CMA - Construction Advances on
Advance Dates from time to time to pay or reimburse Zhone for the costs of the
Construction Project and certain other costs described in xxx Xxxxxxxxx 0&0 XXX.
In addition, BNPLC may
-15-
from time to time make expenditures or incur costs constituting Construction
Advances after a Landlord's Election to Continue Construction as described in
subparagraph 6.(e). As used herein, references to the "Outstanding Construction
Allowance" mean the difference on the date in question (but not less than zero)
of (A) the total of all Prior Advances and Construction Advances made by or on
behalf of BNPLC on or prior to the date in question, plus (B) all Carrying Costs
added on or prior to the date in question, less (C) any funds received and
applied as Qualified Prepayments on or prior to the date in question. Base Rent
will not accrue for any Construction Period. But for each Construction Period
charges ("Carrying Costs") shall accrue for each Construction Period as
described below and will be added to (and thereafter be included in) the
Outstanding Construction Allowance on the last day of such Construction Period
(i.e., generally on the Advance Date upon which such Construction Period ends).
However, if for any reason Stipulated Loss Value (and thus the Outstanding
Construction Allowance included as a component thereof) must be determined as of
any date between Advance Dates, the Outstanding Construction Allowance
determined on such date shall include not only Carrying Costs added on or before
the immediately preceding Advance Date computed as described below, but also
Carrying Costs accruing on and after such preceding Advance Date to but not
including the date in question.
(b Calculation of Carrying Costs.
-----------------------------
(i Carrying Cost Formulas. Carrying Costs accruing for any
----------------------
Construction Period shall equal the sum of two components, referred to
herein as "Basic Carrying Costs" and "Supplemental Carrying Costs".
Subject to the limitations set forth in subparagraph 6.(c), each of the
components will be computed as follows:
a) Basic Carrying Costs. Basic Carrying Costs accruing for any
--------------------
Construction Period shall equal:
. the sum on the first day of such Construction Period of (i)
Stipulated Loss Value calculated under (and as defined in)
the Buildings 1&2 CDPA and (ii) xxx Xxxxxxxxx 0&0 Xxxx
Xxxxxxxxxx of Stipulated Loss Value calculated under (and as
defined in) the Land CDPA, times
. the sum of (1) the Secured Spread and (2) the Effective
Rate/Deposit Rate Difference for such Construction Period,
times
. the number of days in the period from and including the
preceding Advance Date to but not including the Advance Date
upon which the period ends, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that on the first
day of a hypothetical Construction Period such Construction Period
Combined Stipulated Loss Value is $15,000,000; that the sum of the
Secured Spread and the Effective Rate/Deposit Rate Difference for
such Construction Period is forty-two and one-half basis points
(42.5/100 of 1%); and that such Construction Period contains exactly
thirty days. Under such assumptions, the Carrying Costs for the
hypothetical Construction Period will equal:
$15,000,000 x .425% x 30/360 = $5,312.50
-16-
b) Supplemental Carrying Costs. Supplemental Carrying Costs
---------------------------
accruing for any Construction Period shall equal:
. the sum on the first day of such Construction Period of (i)
Stipulated Loss Value calculated under (and as defined in)
the Buildings 1&2 CDPA and (ii) xxx Xxxxxxxxx 0&0 Xxxx
Xxxxxxxxxx of Stipulated Loss Value calculated under (and as
defined in) the Land CDPA, times
. the Deposit Rate for such Construction Period, times
. the number of days in the period from and including the
preceding Advance Date to but not including the Advance Date
upon which the period ends, divided by
. three hundred sixty.
Assume, only for the purpose of illustration: that on the first
day of a hypothetical Construction Period such Construction Period
Combined Stipulated Loss Value is $15,000,000; that the Deposit Rate
for such Construction Period is six percent (6%) per annum; and that
such Construction Period contains exactly thirty days. Under such
assumptions, the Carrying Costs for the hypothetical Construction
Period will equal:
$15,000,000 x 6% x 30/360 = $75,000
(ii Explanation of Carrying Cost Formulas/Agreement of BNPLC to Fund
----------------------------------------------------------------
Additional Collateral Equal to Supplemental Carrying Costs. If total
----------------------------------------------------------
Carrying Costs for any Construction Period were limited only to the Basic
Carrying Costs, then such total Carrying Costs would reflect the same
reduction as the reduction of Base Rent described in subparagraph 3.(b).
However, unlike Base Rent, Carrying Costs will not be paid directly from
Zhone to BNPLC in periodic payments as they accrue, so a reduction of
Carrying Costs cannot provide Zhone with the economic equivalent of
periodic payments of interest accruing at the Deposit Rate on the
Collateral. Thus, rather than agree to so limit total Carrying Costs,
BNPLC and Zhone agree as follows:
a) Supplemental Carrying Costs will accrue for each Construction
Period and, like Basic Carrying Costs, be added to the Outstanding
Construction Allowance as provided above.
b) Each time BNPLC adds Supplemental Carrying Costs to the
Outstanding Construction Allowance pursuant to the foregoing
provisions, BNPLC will also make a deposit into one or more Accounts
(as defined in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx) for Zhone in an
amount equal to the Supplemental Carrying Costs so added. Such
deposit will be added to and constitute Collateral pledged on and
subject to the terms and conditions set forth in xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx as if it had been deposited by Zhone itself.
Accordingly, any withdrawal from the Accounts of any such deposits by
BNPLC for Zhone will be subject to the same terms and conditions of
xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx that apply to other Collateral. By
providing for such deposits on behalf of Zhone equal to Supplemental
Carrying Costs, Zhone will get the economic equivalent of periodic
payments of interest on the Collateral as if the interest accrued from
time to time at the Deposit Rate. In no event, however, shall any
such deposit constitute a "Construction Advance" under and as defined
in the Buildings 1&2
-17-
CMA, it being understood that, although the Supplemental Carrying
Costs used to compute the amount of such a deposit will be added to
the Outstanding Construction Allowance, the deposit itself will not be
added to the Outstanding Construction Allowance.
(c Limits on the Amount of Carrying Costs.
---------------------------------------
(i Limit Tied to Maximum Construction Allowance. Notwithstanding
--------------------------------------------
the foregoing, because the Construction Allowance available to Zhone under
the Buildings 1&2 CMA is limited in amount to the Maximum Construction
Allowance, and because Carrying Costs are to be charged against the
Construction Allowance, Carrying Costs added to the Outstanding
Construction Allowance on the Buildings 1&2 Base Rent Commencement Date
shall not exceed the amount that can be added without causing the Funded
Construction Allowance to exceed the Maximum Construction Allowance. If,
because of an extension of the Buildings 1&2 Base Rent Commencement Date by
BNPLC (as described in the definition thereof in the Buildings 1&2 CDPA) or
because of any Landlord's Election to Continue Construction, the Funded
Construction Allowance already exceeds the Maximum Construction Allowance,
then no Carrying Costs will be added to the Outstanding Construction
Allowance on the Buildings 1&2 Base Rent Commencement Date.
(ii Limit Tied to Funding by Participants. Notwithstanding anything
-------------------------------------
in the foregoing provisions to the contrary, the addition of Supplemental
Carrying Costs to the Outstanding Construction Allowance on any Advance
Date or on xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date, and BNPLC's
obligation in connection therewith to make a deposit for Zhone equal to
such Supplemental Carrying Costs, shall be subject to the conditions that
(A) no Event of Default shall have occurred and be continuing and no CMA
Termination Event shall have occurred, and (B) no Participant (other than
an Affiliate of BNPLC) shall have failed to advance its pro rata share of
the funds needed to make such deposit as contemplated by the Participation
Agreement. In this regard, it is understood that BNPLC will not be
responsible for a breach by any Participant (other than an Affiliate of
BNPLC) of its obligation to make advances required by the Participation
Agreement.
(d Zhone's Right to Control the Construction Project. Subject to
-------------------------------------------------
BNPLC's rights under subparagraph 6.(e) of this Xxxxxxxxx 0&0 Xxxxx, xxx
Xxxxxxxxx 0&0 XXX grants to Zhone the sole right and responsibility for
designing and constructing the Construction Project, it being understood that
although title to all Improvements on the Buildings 1&2 Site will pass directly
to BNPLC (as more particularly provided in Paragraph 7), BNPLC's obligation with
respect to the Construction Project shall be limited to the making of advances
under and subject to the conditions set forth in xxx Xxxxxxxxx 0&0 XXX. No
contractor or other third party shall be entitled to require BNPLC to make
advances as a third party beneficiary of this Buildings 1&2 Lease or of the
Buildings 1&2 CMA or otherwise.
(e Landlord's Election to Continue Construction. Without limiting
--------------------------------------------
BNPLC's other rights and remedies under this Buildings 1&2 Lease, and without
terminating this Buildings 1&2 Lease or Zhone's obligations hereunder or under
any of the other documents referenced herein, in the event of any termination of
the Buildings 1&2 CMA as provided in subparagraph 4(D) or subparagraph 4(E)
--------------------------------------
thereof, BNPLC shall be entitled (but not obligated) to take whatever action it
deems necessary or appropriate by the use of legal proceedings or otherwise to
continue or complete the Construction Project in a manner substantially
consistent (to the extent practicable under Applicable Laws) with the general
description of the Construction Project set forth in Exhibit B to the Buildings
---------
1&2 CMA and with the permitted use of the Property set forth in subparagraph
2.(a). (As used herein, "Landlord's Election to Continue Construction" means any
election by BNPLC to continue or complete the Construction Project pursuant to
the preceding sentence.) After any
-18-
Landlord's Election to Continue Construction, BNPLC may do any one or more of
the following pursuant to this subparagraph without further notice and
regardless of whether any Event of Default is then continuing:
(i Take Control of the Property. BNPLC may cause Zhone and any
----------------------------
contractors or other parties on the Property to vacate the Property until
the Construction Project is complete or BNPLC elects not to continue work
on the Construction Project.
(ii Continuation of Construction. BNPLC may perform or cause to be
----------------------------
performed any work to complete or continue the construction of the
Construction Project. In this regard, so long as work ordered or undertaken
by BNPLC is substantially consistent (to the extent practicable under
Applicable Laws) with the general description of the Construction Project
set forth in Exhibit B to the Buildings 1&2 CMA and the permitted use of
---------
the Property set forth in subparagraph 2.(a), BNPLC shall have complete
discretion to:
a) proceed with construction according to such plans and
specifications as BNPLC may from time to time approve;
b) establish and extend construction deadlines as BNPLC from
time to time deems appropriate, without obligation to adhere to the
deadlines for completion of construction set forth in xxx Xxxxxxxxx
0&0 XXX;
c) hire, fire and replace architects, engineers, contractors,
construction managers and other consultants as BNPLC from time to time
deems appropriate, without obligation to use, consider or compensate
architects, engineers, contractors, construction managers or other
consultants previously selected or engaged by Zhone;
d) determine the compensation that any architect, engineer,
contractor, construction manager or other consultant engaged by BNPLC
will be paid, and the terms and conditions that will govern the
payment of such compensation (including whether payment will be due in
advance, over the course of construction or on some other basis and
including whether contracts will be let on a fixed price basis, a cost
plus a fee basis or some other basis), as BNPLC from time to time
deems appropriate;
e) pay, settle or compromise existing or future bills and claims
which are or may be liens against the Property or as BNPLC considers
necessary or desirable for the completion of the Construction Project
or the removal of any clouds on title to the Property;
f) prosecute and defend all actions or proceedings in connection
with the construction of the Construction Project;
g) select and change interior and exterior finishes for the
Improvements and landscaping on the Buildings 1&2 Site as BNPLC from
time to time deems appropriate; and
h) generally do anything that Zhone itself might have done if
Zhone had satisfied or obtained BNPLC's waiver of the conditions
specified therein.
(iii Arrange for Turnkey Construction. Without limiting the
--------------------------------
generality of the foregoing, BNPLC may engage any contractor or real estate
developer BNPLC believes to be reputable to take over and complete
construction of the Construction Project on a "turnkey" basis.
-19-
(iv Suspension or Termination of Construction. Notwithstanding any
-----------------------------------------
Landlord's Election to Continue Construction, BNPLC may subsequently elect
at any time to suspend or terminate further construction without obligation
to Zhone.
For purposes of this Buildings 1&2 Lease and other Buildings 1&2 Operative
Documents (including the determination of the Outstanding Construction
Allowance, Stipulated Loss Value, the Buildings 1&2 Break Even Amount and the
Maximum Permitted Prepayment), after any Landlord's Election to Continue
Construction, all costs and expenditures incurred or paid by or on behalf of
BNPLC to complete or continue construction as provided in this subparagraph
shall be considered Construction Advances and Project Costs, regardless of
whether they cause the Funded Construction Allowance to exceed the Maximum
Construction Allowance. Further, as used in the preceding sentence, "costs
incurred" by BNPLC will include costs that BNPLC has become obligated to pay to
any third party that is not an Affiliate of BNPLC (including any contractor),
even if the payments for which BNPLC has become so obligated will constitute
prepayments for work or services to be rendered after payment and
notwithstanding that BNPLC's obligations for the payments may be conditioned
upon matters beyond BNPLC's control. For example, even if a construction
contract between BNPLC and a contractor excused BNPLC from making further
progress payments to the contractor upon Zhone's failure to make any required
Issue 97-10 Prepayment hereunder, the obligation to make a progress payment
would nonetheless be "incurred" by BNPLC, for purposes of determining whether
BNPLC has incurred costs considered to be Project Costs and Construction
Advances, when BNPLC's obligation to pay it became subject only to Zhone's
payment of an Issue 97-10 Prepayment or other conditions beyond BNPLC's control.
If and to the extent, however, BNPLC does incur costs considered as Construction
Advances under this subparagraph, but (1) BNPLC does not actually pay the costs
and after incurring them BNPLC is fully and finally excused from the obligation
to pay them for any reason other than a breach by Zhone of this Buildings 1&2
Lease or other Buildings 1&2 Operative Documents, or (2) BNPLC receives a refund
of such costs, then the costs BNPLC is excused from paying or refunded to BNPLC
shall be considered Qualified Prepayments.
(f Powers Coupled With an Interest. BNPLC's rights under
-------------------------------
subparagraph 6.(e) are intended to constitute powers coupled with an interest
which cannot be revoked.
(g Completion Notice. After any Landlord's Election to Continue
-----------------
Construction, BNPLC may provide a notice (a "Completion Notice") to Zhone,
advising Zhone that construction of the Construction Project is substantially
complete or that BNPLC no longer intends to continue such construction at that
time.
7. Status of Property Acquired With Funds Provided by BNPLC. All
Improvements on the Buildings 1&2 Site constructed during the term of this
Buildings 1&2 Lease shall be owned by BNPLC and shall constitute "Property"
covered by this Buildings 1&2 Lease. Further, to the extent heretofore or
hereafter acquired (in whole or in part) with any portion of the Prior Funding
Advances, with any Construction Advances or with other funds for which Zhone has
received or hereafter receives reimbursement from the Prior Funding Advances or
Construction Advances, all furnishings, furniture, chattels, permits, licenses,
franchises, certificates and other personal property of whatever nature
(excluding personal property, if any, acquired for the Seller and incorporated
into or consumed in the construction of off-site improvements contemplated in
the Acquisition Contract) shall have been acquired on behalf of BNPLC by Zhone,
shall be owned by BNPLC and shall constitute "Property" covered by this
Buildings 1&2 Lease, as shall all renewals or replacements of or substitutions
for any such Property. Zhone shall not authorize or permit the transfer of title
to the Improvements or to any other such Property to pass through Zhone or
Zhone's Affiliates before it is transferred to BNPLC from contractors,
suppliers, vendors or other third Persons. Nothing herein shall constitute
authorization of Zhone by BNPLC to bind BNPLC to any construction contract or
other agreement with a third Person, but any construction contract or other
agreement executed by Zhone for the acquisition or construction
-20-
of Improvements or other components of the Property may provide for the transfer
of title as required by the preceding sentence. Upon request of BNPLC, Zhone
shall deliver to BNPLC an inventory describing all significant items of Personal
Property (and, in the case of tangible personal property, showing the make,
model, serial number and location thereof), with a certification by Zhone that
such inventory is true and complete and that all items specified in the
inventory are covered by this Buildings 1&2 Lease free and clear of any Lien
other than the Permitted Encumbrances or Liens Removable by BNPLC.
8. Environmental.
(a Environmental Covenants by Zhone. Zhone covenants that:
--------------------------------
(i Zhone shall not conduct or permit others to conduct
Hazardous Substance Activities, except Permitted Hazardous Substance Use
and Remedial Work.
(ii Zhone shall not discharge or permit the discharge of
anything on or from the Property that would require any permit under
applicable Environmental Laws, other than (1) storm water runoff, (2) waste
water discharges through a publicly owned treatment works, (3) discharges
that are a necessary part of any Remedial Work, and (4) other similar
discharges consistent with the definition herein of Permitted Hazardous
Substance Use, in each case in strict compliance with Environmental Laws.
(iii Following any discovery that Remedial Work is required by
Environmental Laws or otherwise believed by BNPLC to be reasonably
required, and to the extent not inconsistent with the other provisions of
this Buildings 1&2 Lease, Zhone shall promptly perform and diligently and
continuously pursue such Remedial Work, in each case in strict compliance
with Environmental Laws.
(iv If requested by BNPLC in connection with any Remedial Work
required by this subparagraph, Zhone shall retain independent environmental
consultants acceptable to BNPLC to evaluate any significant new information
generated during Zhone's implementation of the Remedial Work and to discuss
with Zhone whether such new information indicates the need for any
additional measures that Zhone should take to protect the health and safety
of persons (including employees, contractors and subcontractors and their
employees) or to protect the environment. Zhone shall implement any such
additional measures to the extent required with respect to the Property by
Environmental Laws or otherwise believed by BNPLC to be reasonably required
and to the extent not inconsistent with the other provisions of this
Buildings 1&2 Lease.
(b Right of BNPLC to do Remedial Work Not Performed by Zhone. If
---------------------------------------------------------
Zhone's failure to cure any breach of the covenants set forth in subparagraph
8.(a) continues beyond the Environmental Cure Period (as defined below), BNPLC
may, in addition to any other remedies available to it, conduct all or any part
of the Remedial Work. To the extent that Remedial Work is done by BNPLC pursuant
to the preceding sentence (including any removal of Hazardous Substances), the
cost thereof shall be a demand obligation owing by Zhone to BNPLC. As used in
this subparagraph, "Environmental Cure Period" means the period ending on the
earlier of: (1) one hundred eighty days after Zhone is notified of the breach
which must be cured within such period, (2) the date that any writ or order is
issued for the levy or sale of any property owned by BNPLC (including the
Property) because of such breach, (3) the date that any criminal action is
instituted or overtly threatened against BNPLC or any of its directors, officers
or employees because of such breach, or (4) any Designated Sale Date upon which,
for any reason, Zhone or an Affiliate of Zhone or any Applicable Purchaser shall
not purchase BNPLC's interest in the Property pursuant to xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement for a net price to BNPLC
-21-
(when taken together with any Buildings 1&2 Supplemental Payment made by Zhone
pursuant to Paragraph 1(A)(3) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement, in the
-----------------
case of a purchase by an Applicable Purchaser) equal to Stipulated Loss Value.
(c Environmental Inspections and Reviews. BNPLC reserves the right
-------------------------------------
to retain environmental consultants to review any report required by Applicable
Law to be prepared by Zhone or to conduct BNPLC's own investigation to confirm
whether Zhone is complying with the requirements of this Paragraph 8. Zhone
grants to BNPLC and to BNPLC's agents, employees, consultants and contractors
the right to enter upon the Property during reasonable hours and after
reasonable notice to inspect the Property and to perform such tests as BNPLC
deems necessary or appropriate to review or investigate Hazardous Substances in,
on, under or about the Property or any discharge or suspected discharge of
Hazardous Substances into groundwater or surface water from the Property. Zhone
shall promptly reimburse BNPLC for the fees of its environmental consultants and
the costs of any such inspections and tests; provided, however, BNPLC's right to
such reimbursement shall be limited to the following circumstances: (1) a breach
of this Paragraph 8 by Zhone shall, in fact, have occurred or an Event of
Default shall have occurred and be continuing at the time BNPLC engages the
consultants or first initiates the inspections and tests; (2) BNPLC shall have
engaged the consultants or undertaken the tests and inspections to establish the
condition of the Property just prior to any conveyance of the Property pursuant
to the Option Agreement or to the expiration of this Buildings 1&2 Lease; (3)
BNPLC shall have engaged the consultants or undertaken the inspections and tests
to satisfy any regulatory requirements applicable to BNPLC or its Affiliates; or
(4) BNPLC shall have engaged the consultants or undertaken the tests because
BNPLC was notified of a violation of Environmental Laws concerning the Property
by any governmental authority or owner of other land in the vicinity of the
Land.
(d Communications Regarding Environmental Matters.
----------------------------------------------
(i Zhone shall immediately advise BNPLC of (1) any discovery of
any event or circumstance which would render any of the representations of
Zhone herein or in the Closing Certificate concerning environmental matters
materially inaccurate or misleading if made at the time of such discovery
and assuming that Zhone was aware of all relevant facts, (2) any Remedial
Work (or change in Remedial Work) required or undertaken by Zhone or its
Affiliates in response to any (A) discovery of any Hazardous Substances on,
under or about the Property other than Permitted Hazardous Substances or
(B) any claim for damages resulting from Hazardous Substance Activities,
(3) Zhone's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Property which could cause the Property
or any part thereof to be subject to any ownership, occupancy,
transferability or use restrictions under Environmental Laws, or (4) any
investigation or inquiry of any failure or alleged failure by Zhone to
comply with Environmental Laws affecting the Property by any governmental
authority responsible for enforcing Environmental Laws. In such event,
Zhone shall deliver to BNPLC within thirty days after BNPLC's request, a
preliminary written environmental plan setting forth a general description
of the action that Zhone proposes to take with respect thereto, if any, to
bring the Property into compliance with Environmental Laws or to correct
any breach by Zhone of this Paragraph 8, including any proposed Remedial
Work, the estimated cost and time of completion, the name of the contractor
and a copy of the construction contract, if any, and such additional data,
instruments, documents, agreements or other materials or information as
BNPLC may request.
(ii Zhone shall provide BNPLC with copies of all material
written communications with federal, state and local governments, or
agencies relating to the matters listed in the preceding clause (i). Zhone
shall also provide BNPLC with copies of any correspondence from third
Persons which
-22-
threaten litigation over any significant failure or alleged significant
failure of Zhone to maintain or operate the Property in accordance with
Environmental Laws.
(iii Prior to Zhone's submission of a Material Environmental
Communication to any governmental or regulatory agency or third party,
Zhone shall, to the extent practicable, deliver to BNPLC a draft of the
proposed submission (together with the proposed date of submission), and in
good faith assess and consider any comments of BNPLC regarding the same.
Promptly after BNPLC's request, Zhone shall meet with BNPLC to discuss the
submission, shall provide any additional information requested by BNPLC and
shall provide a written explanation to BNPLC addressing the issues raised
by comments (if any) of BNPLC regarding the submission, including a
reasoned analysis supporting any decision by Zhone not to modify the
submission in accordance with comments of BNPLC.
9. Insurance Required and Condemnation.
(a Liability Insurance. Throughout the Term Zhone shall maintain
-------------------
commercial general liability insurance against claims for bodily and personal
injury, death and property damage occurring in or upon or resulting from any
occurrence in or upon the Property under one or more insurance policies that
satisfy the requirements set forth in Exhibit B. Zhone shall deliver and
---------
maintain with BNPLC for each liability insurance policy required by this
Buildings 1&2 Lease written confirmation of the policy and the scope of the
coverage provided thereby issued by the applicable insurer or its authorized
agent, which confirmation must also satisfy the requirements set forth in
Exhibit B.
---------
(b Property Insurance. Throughout the Term Zhone will keep all
------------------
Improvements on the Buildings 1&2 Site (including all alterations, additions and
changes made to the Improvements on the Buildings 1&2 Site) insured against fire
and other casualty under one or more property insurance policies that satisfy
the requirements set forth in Exhibit B. Zhone shall deliver and maintain with
---------
BNPLC for each property insurance policy required by this Buildings 1&2 Lease
written confirmation of the policy and the scope of the coverage provided
thereby issued by the applicable insurer or its authorized agent, which
confirmation must also satisfy the requirements set forth in Exhibit B. If any
---------
of the Property is destroyed or damaged by fire, explosion, windstorm, hail or
by any other casualty against which insurance shall have been required
hereunder, (i) BNPLC may, but shall not be obligated to, make proof of loss if
not made promptly by Zhone after notice from BNPLC, (ii) each insurance company
concerned is hereby authorized and directed to make payment for such loss
directly to BNPLC for application as required by Paragraph 10, and (iii) BNPLC
may settle, adjust or compromise any and all claims for loss, damage or
destruction under any policy or policies of insurance (provided, that if any
such claim is for less than $500,000, if no CMA Termination Event shall have
occurred and no Event of Default shall have occurred and be continuing, Zhone
shall have the right to settle, adjust or compromise the claim as Zhone deems
appropriate; and, provided further, that so long as no CMA Termination Event
shall have occurred and no Event of Default shall have occurred and be
continuing, BNPLC must provide Zhone with at least forty-five days notice of
BNPLC's intention to settle any such claim before settling it unless Zhone shall
already have approved of the settlement by BNPLC). If any casualty shall result
in damage to or loss or destruction of the Property, Zhone shall give immediate
notice thereof to BNPLC and Paragraph 10 shall apply.
(c Failure to Obtain Insurance. If Zhone fails to obtain any
---------------------------
insurance or to provide confirmation of any such insurance as required by this
Buildings 1&2 Lease, BNPLC shall be entitled (but not required) to obtain the
insurance that Zhone has failed to obtain or for which Zhone has not provided
the required confirmation and, without limiting BNPLC's other remedies under the
circumstances, BNPLC may require Zhone to reimburse BNPLC for the cost of such
insurance and to pay interest thereon computed at the Default Rate from the date
such cost was paid by BNPLC until the date of reimbursement by Zhone (provided,
however, that any such insurance cost paid by BNPLC prior to xxx Xxxxxxxxx 0&0
Xxxx Rent Commencement
-23-
Date will be charged against the Construction Allowance under the Buildings 1&2
CMA as if it had been paid by Zhone).
(d Condemnation. Immediately upon obtaining knowledge of the
------------
institution of any proceedings for the condemnation of the Property or any
portion thereof, or any other similar governmental or quasi-governmental
proceedings arising out of injury or damage to the Property or any portion
thereof, each party shall notify the other (provided, however, BNPLC shall have
no liability for its failure to provide such notice) of the pendency of such
proceedings. Zhone shall, at its expense, diligently prosecute any such
proceedings and shall consult with BNPLC, its attorneys and experts and
cooperate with them as requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds of sale in lieu of
condemnation with respect to the Property and all judgments, decrees and awards
for injury or damage to the Property shall be paid to BNPLC as Buildings 1&2
Escrowed Proceeds, and all such proceeds will be applied as provided in
Paragraph 10. BNPLC is hereby authorized, in the name of Zhone, at any time
after a CMA Termination Event or when an Event of Default shall have occurred
and be continuing, or otherwise with Zhone's prior consent, to execute and
deliver valid acquittances for, and to appeal from, any such judgment, decree or
award concerning condemnation of any of the Property. BNPLC shall not be in any
event or circumstances liable or responsible for failure to collect, or to
exercise diligence in the collection of, any such proceeds, judgments, decrees
or awards.
10. Application of Insurance and Condemnation Proceeds.
(a Collection and Application of Insurance and Condemnation Proceeds
-----------------------------------------------------------------
Generally. This Paragraph 10 shall govern the application of proceeds received
---------
by BNPLC or Zhone during the Term from any third party (1) under any property
insurance policy as a result of damage to the Property (including proceeds
payable under any insurance policy covering the Property which is maintained by
Zhone), (2) as compensation for any restriction placed upon the use or
development of the Property or for the condemnation of the Property or any
portion thereof, or (3) because of any judgment, decree or award for injury or
damage to the Property; excluding, however, any funds paid to BNPLC by BNPLC's
Parent, by an Affiliate of BNPLC or by any Participant that is made to
compensate BNPLC for any Losses BNPLC may suffer or incur in connection with
this Buildings 1&2 Lease or the Property. Except as provided in subparagraph
10.(d), Zhone will promptly pay over to BNPLC any insurance, condemnation or
other proceeds covered by this Paragraph 10 which Zhone may receive from any
insurer, condemning authority or other third party. All proceeds covered by this
Paragraph 10, including those received by BNPLC from Zhone or third parties,
shall be applied as follows:
(i First, proceeds covered by this Paragraph 10 will be used to
reimburse BNPLC for any costs and expenses, including Attorneys' Fees, that
BNPLC incurred to collect the proceeds.
(ii Second, the proceeds remaining after such reimbursement to
BNPLC (hereinafter, the "Remaining Proceeds") will be applied, as
hereinafter more particularly provided, either as a Qualified Prepayment or
to reimburse Zhone or BNPLC for the actual out-of-pocket costs of repairing
or restoring the Property. Until, however, any Remaining Proceeds received
by BNPLC are applied by BNPLC as a Qualified Prepayment or applied by BNPLC
to reimburse costs of repairs to or restoration of the Property pursuant to
this Paragraph 10, BNPLC shall hold and maintain such Remaining Proceeds as
Buildings 1&2 Escrowed Proceeds in an interest bearing account, and all
interest earned on such account shall be added to and made a part of such
Buildings 1&2 Escrowed Proceeds.
(b Advances of Buildings 1&2 Escrowed Proceeds to Zhone. Except as
----------------------------------------------------
otherwise provided below in this Paragraph 10, BNPLC shall advance all Remaining
Proceeds held by it as Buildings 1&2 Escrowed
-24-
Proceeds to reimburse Zhone for the actual out-of-pocket cost to Zhone of
repairing or restoring the Property in accordance with the requirements of this
Buildings 1&2 Lease and the other Buildings 1&2 Operative Documents as the
applicable repair or restoration progresses and upon compliance by Zhone with
such terms, conditions and requirements as may be reasonably imposed by BNPLC.
In no event, however, shall BNPLC be required to pay Buildings 1&2 Escrowed
Proceeds to Zhone in excess of the actual out-of-pocket cost to Zhone of the
applicable repair or restoration, as evidenced by invoices or other
documentation satisfactory to BNPLC, it being understood that BNPLC may retain
and apply any such excess as a Qualified Prepayment.
(c Application of Buildings 1&2 Escrowed Proceeds as a Qualified
-------------------------------------------------------------
Prepayment. Provided Zhone has completed the Construction Project pursuant to
----------
xxx Xxxxxxxxx 0&0 XXX and no Event of Default shall have occurred and be
continuing, BNPLC shall apply any Remaining Proceeds paid to it (or other
amounts available for application as a Qualified Prepayment) as a Qualified
Prepayment on any date that BNPLC is directed to do so by a notice from Zhone;
however, if such a notice from Zhone specifies an effective date for a Qualified
Prepayment that is less than five Business Days after BNPLC's actual receipt of
the notice, BNPLC may postpone the date of the Qualified Prepayment to any date
not later than five Business Days after BNPLC's receipt of the notice. In any
event, except when BNPLC is required by the preceding sentence to apply
Remaining Proceeds or other amounts as a Qualified Prepayment on an Advance Date
or Base Rent Date, BNPLC may deduct Breakage Costs incurred in connection with
any Qualified Prepayment from the Remaining Proceeds or other amounts available
for application as the Qualified Prepayment, and Zhone will reimburse BNPLC upon
request for any such Breakage Costs that BNPLC incurs but does not deduct.
(d Special Provisions Applicable After Completion by Zhone of the
--------------------------------------------------------------
Construction Project. If, after xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date
--------------------
and Zhone's completion of the Construction Project pursuant to the Buildings 1&2
CMA, any taking by condemnation of any portion of the Property or any casualty
resulting in the diminution, destruction, demolition or damage to any portion of
the Property shall (in the good faith judgment of BNPLC) reduce the then current
"AS IS" market value by less than $500,000 and (in the good faith estimation of
BNPLC) be unlikely to result in Remaining Proceeds of more than $500,000, and if
no Event of Default shall have occurred and be continuing, then BNPLC will, upon
Zhone's request, instruct the condemning authority or insurer, as applicable, to
pay the Remaining Proceeds resulting therefrom directly to Zhone. Zhone shall
apply any such Remaining Proceeds to the repair or restoration of the Property
to a safe and secure condition and to a value of no less than the value before
taking or casualty.
(e Special Provisions Applicable After a CMA Termination Event or
--------------------------------------------------------------
Event of Default. Notwithstanding the foregoing, after any CMA Termination
----------------
Event, and when any Event of Default shall have occurred and be continuing,
BNPLC shall be entitled to receive and collect all insurance, condemnation or
other proceeds governed by this Paragraph 10 and to apply all Remaining
Proceeds, when and to the extent deemed appropriate by BNPLC in its sole
discretion, either (A) to the reimbursement of Zhone or BNPLC for the out-of-
pocket cost of repairing or restoring the Property, or (B) as Qualified
Prepayments.
(f Zhone's Obligation to Restore. Regardless of the adequacy of any
-----------------------------
Remaining Proceeds available to Zhone hereunder, and notwithstanding other
provisions of this Buildings 1&2 Lease to the contrary:
(1) If, prior to xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date, the
Property is damaged by fire or other casualty or any part of the Property
is taken by condemnation, Zhone shall to the maximum extent possible, as
part of the Work contemplated in the Buildings 1&2 CMA, restore the
Property or the remainder thereof and continue construction of the
Construction Project on and subject to the terms and conditions set forth
in xxx Xxxxxxxxx 0&0 XXX. However, any additional costs required to
complete the Construction Project resulting from such a casualty or taking
prior to the Buildings 1&2
-25-
Base Rent Commencement Date shall, to the extent not covered by Remaining
Proceeds paid to Zhone as provided in this Buildings 1&2 Lease, be subject
to reimbursement by BNPLC under the Buildings 1&2 CMA on the same terms and
conditions that apply to reimbursements of other costs of the Work
thereunder.
(2) If, on or after xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date,
the Property is damaged by fire or other casualty or less than all or
substantially all of the Property is taken by condemnation, Zhone must:
A) promptly restore or improve the Property or the remainder
thereof to a value no less than Stipulated Loss Value and to a
reasonably safe and sightly condition; or
B) promptly restore the Property to a reasonably safe and
sightly condition and pay to BNPLC for application as a Qualified
Prepayment the amount (if any), as determined by BNPLC, needed to
reduce Stipulated Loss Value to no more than the then current "AS IS"
market value of the Property or remainder thereof.
(g) Takings of All or Substantially All of the Property on or after
---------------------------------------------------------------
the Buildings 1&2 Base Rent Commencement Date. In the event of any taking of all
---------------------------------------------
or substantially all of the Property on or after the Buildings 1&2 Base Rent
Commencement Date, BNPLC shall be entitled to apply all Remaining Proceeds as a
Qualified Prepayment. In addition, if Stipulated Loss Value immediately prior
to any such taking exceeds the sum of the Remaining Proceeds resulting from such
condemnation, then BNPLC shall be entitled to recover the excess from Zhone upon
demand as an additional Qualified Prepayment, whereupon this Buildings 1&2 Lease
shall terminate. Any taking of so much of the Real Property as, in BNPLC's
reasonable good faith judgment, makes it impracticable to restore or improve the
remainder thereof as required by part (2) of the preceding subparagraph shall be
considered a taking of substantially all the Property for purposes of this
Paragraph 10.
11. Additional Representations, Warranties and Covenants of Zhone
Concerning the Property. Zhone represents, warrants and covenants as follows:
(a) Compliance with Covenants and Laws. The use of the Property
----------------------------------
permitted by this Buildings 1&2 Lease complies, or will comply after Zhone
obtains available permits as the tenant under this Buildings 1&2 Lease, in all
material respects with all Applicable Laws. Zhone has obtained or will promptly
obtain all utility, building, health and operating permits as may be required by
any governmental authority or municipality having jurisdiction over the Property
for the construction contemplated herein and the use of the Property permitted
by this Buildings 1&2 Lease.
(b) Operation of the Property. During the Term, Zhone shall operate
-------------------------
the Property in a good and workmanlike manner and substantially in compliance
with all Applicable Laws and will pay or cause to be paid all fees or charges of
any kind in connection therewith. (If Zhone does not promptly correct any
failure of the Property to comply with Applicable Laws that is the subject of a
written notice given to Zhone or BNPLC by any governmental authority, then for
purposes of the preceding sentence, Zhone shall be considered not to have
maintained the Property "substantially in accordance with Applicable Laws"
whether or not the noncompliance would be substantial in the absence of the
notice.) During the Term, Zhone shall not use or occupy, or allow the use or
occupancy of, the Property in any manner which violates any Applicable Law or
which constitutes a public or private nuisance or which makes void, voidable or
cancelable any insurance then in force with respect thereto. During the Term,
to the extent that any of the following would, individually or in the aggregate,
increase the likelihood of a CMA Termination Event under the Buildings 1&2 CMA
or materially and
-26-
adversely affect the value of the Property or the use of the Property for
purposes permitted by this Buildings 1&2 Lease, Zhone shall not, without BNPLC's
prior consent: (i) initiate or permit any zoning reclassification of the
Property; (ii) seek any variance under existing zoning ordinances applicable to
the Property; (iii) use or permit the use of the Property in a manner that would
result in such use becoming a nonconforming use under applicable zoning
ordinances or similar laws, rules or regulations; (iv) execute or file any
subdivision plat affecting the Property; or (v) consent to the annexation of the
Property to any municipality. If during the Term (A) a change in the zoning or
other Applicable Laws affecting the permitted use or development of the Property
shall occur after xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date that (in BNPLC's
good faith judgment) reduces the value of the Property, or (B) conditions or
circumstances on or about the Property are discovered after the Buildings 1&2
Base Rent Commencement Date (such as the presence of an endangered species)
which substantially impede development and thereby (in BNPLC's good faith
judgment) reduce the value of the Property, then Zhone shall upon demand pay
BNPLC an amount equal to such reduction (as determined by BNPLC in good faith)
for application as a Qualified Prepayment. Zhone shall not permit any drilling
or exploration for, or extraction, removal or production of, minerals from the
surface or subsurface of the Property, and Zhone shall not do anything that
could reasonably be expected to significantly reduce the market value of the
Property. If Zhone receives a notice or claim from any federal, state or other
governmental authority that the Property is not in compliance with any
Applicable Law, or that any action may be taken against BNPLC because the
Property does not comply with any Applicable Law, Zhone shall promptly furnish a
copy of such notice or claim to BNPLC.
Notwithstanding the foregoing, Zhone may in good faith, by appropriate
proceedings, contest the validity and applicability of any Applicable Law with
respect to the Property, and pending such contest Zhone shall not be deemed in
default hereunder because of the violation of such Applicable Law, if Zhone
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to BNPLC, and if Zhone promptly causes the Property to comply with
any such Applicable Law upon a final determination by a court of competent
jurisdiction that the same is valid and applicable to the Property; provided,
however, in any event such contest shall be concluded and the violation of such
Applicable Law must be corrected by Zhone and any claims asserted against BNPLC
or the Property because of such violation must be paid by Zhone, all prior to
the earlier of (i) the date that any criminal prosecution is instituted or
overtly threatened against BNPLC or any of its directors, officers or employees
because of such violation, (ii) the date that any action is taken by any
governmental authority against BNPLC or any property owned by BNPLC (including
the Property) because of such violation, or (iii) a Designated Sale Date upon
which, for any reason, Zhone or an Affiliate of Zhone or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement for a price to BNPLC (when taken together with
any additional payments made by Zhone pursuant to Paragraph 1(A)(3) of the
-----------------
Xxxxxxxxx 0&0 Xxxxxxxx Agreement, in the case of a purchase by an Applicable
Purchaser) equal to the Buildings 1&2 Break Even Amount.
(c) Debts for Construction, Maintenance, Operation or Development.
-------------------------------------------------------------
Zhone shall cause all debts and liabilities incurred in the construction,
maintenance, operation or development of the Property, including all debts and
liabilities for labor, material and equipment and all debts and charges for
utilities servicing the Property, to be promptly paid; provided, that nothing in
this subparagraph will be construed to require Zhone to remove Liens Removable
by BNPLC.
Notwithstanding the foregoing, Zhone may in good faith, by appropriate
proceedings, contest the validity, applicability or amount of any asserted
mechanic's or materialmen's lien and pending such contest Zhone shall not be
deemed in default under this subparagraph because of the contested lien if (1)
within sixty days after being asked to do so by BNPLC, Zhone bonds over to
BNPLC's reasonable satisfaction all such contested liens against the Property
alleged to secure an amount in excess of $500,000 (individually or in the
-27-
aggregate), (2) Zhone diligently prosecutes such contest to completion in a
manner reasonably satisfactory to BNPLC, and (3) Zhone promptly causes to be
paid any amount adjudged by a court of competent jurisdiction to be due, with
all costs and interest thereon, promptly after such judgment becomes final;
provided, however, that in any event each such contest shall be concluded and
the lien, interest and costs must be paid by Zhone prior to the earlier of (i)
the date that any criminal prosecution is instituted or overtly threatened
against BNPLC or its directors, officers or employees because of the nonpayment
thereof, (ii) the date that any writ or order is issued under which the Property
or any other property in which BNPLC has an interest may be seized or sold or
any other action is taken against BNPLC or any property in which BNPLC has an
interest because of the nonpayment thereof, or (iii) a Designated Sale Date upon
which, for any reason, Zhone or an Affiliate of Zhone or any Applicable
Purchaser shall not purchase BNPLC's interest in the Property pursuant to xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement for a price to BNPLC (when taken together with
any additional payments made by Zhone pursuant to Paragraph 1(A)(3) of the
-----------------
Xxxxxxxxx 0&0 Xxxxxxxx Agreement, in the case of a purchase by an Applicable
Purchaser) equal to the Buildings 1&2 Break Even Amount.
(d) Repair, Maintenance, Alterations and Additions. Zhone shall keep
----------------------------------------------
the Property in good order, operating condition and appearance and shall cause
all necessary repairs, renewals and replacements to be promptly made. Zhone will
not allow any of the Property to be materially misused, abused or wasted, and
Zhone shall promptly replace any worn-out fixtures and Personal Property with
fixtures and Personal Property comparable to the replaced items when new. Zhone
shall not, without the prior consent of BNPLC, (i) remove from the Property any
fixture or Personal Property having significant value except such as are
replaced by Zhone by fixtures or Personal Property of equal suitability and
value, free and clear of any lien or security interest (and for purposes of this
clause "significant value" will mean any fixture or Personal Property that has a
value of more than $100,000 or that, when considered together with all other
fixtures and Personal Property removed and not replaced by Zhone by items of
equal suitability and value, has an aggregate value of $500,000 or more) or (ii)
make on the Buildings 1&2 Site material new Improvements or alter Improvements
in any material respect, except as part of the Work performed in accordance with
the Buildings 1&2 CMA. Without limiting the foregoing, Zhone will notify BNPLC
before making any significant alterations to the Improvements on the Buildings
1&2 Site after the completion of the Construction Project. Nothing in this
subparagraph, however, is intended to limit Zhone's rights and obligations under
other express provisions of this Buildings 1&2 Lease and xxx Xxxxxxxxx 0&0 XXX
with respect to the Construction Project.
(e) Permitted Encumbrances and Development Documents. Zhone shall
------------------------------------------------
during the Term comply with and will cause to be performed all of the covenants,
agreements and obligations imposed upon the owner of any interest in the
Property by the Permitted Encumbrances or the Development Documents. Without
limiting the foregoing, Zhone shall cause all amounts to be paid when due, the
payment of which is secured by any Lien against the Property created by the
Permitted Encumbrances. Without the prior consent of BNPLC, Zhone shall not
enter into, initiate, approve or consent to any modification of any Permitted
Encumbrance or Development Document that would create or expand or purport to
create or expand obligations or restrictions which would encumber BNPLC's
interest in the Property. (Whether BNPLC must give any such consent requested
by Zhone during the Term of this Buildings 1&2 Lease shall be governed by
subparagraph 3(A) of the Closing Certificate and Agreement.)
-----------------
(f) Books and Records Concerning the Property. Zhone shall keep books
-----------------------------------------
and records that are accurate and complete in all material respects for the
Property and, subject to Paragraph 16.(c), will permit all such books and
records (including all contracts, statements, invoices, bills and claims for
labor, materials and services supplied for the construction and operation of any
Improvements on the Buildings 1&2 Site) to be inspected and copied by BNPLC.
This subparagraph shall not be construed as requiring Zhone to regularly
maintain separate books and records relating exclusively to the Property;
provided, however, that upon request,
-28-
Zhone shall construct or abstract from its regularly maintained books and
records information required by this subparagraph relating to the Property.
12. Financial Covenants and Other Covenants Incorporated by Reference to
Schedule 1. Throughout the Term of this Buildings 1&2 Lease, Zhone shall comply
----------
with the requirements of Schedule 1 attached hereto.
----------
13. Financial Statements and Other Reports.
(a) Financial Statements; Required Notices; Certificates. Throughout
----------------------------------------------------
the Term of this Buildings 1&2 Lease, Zhone shall deliver to BNPLC and to each
Participant:
(i) as soon as available and in any event within one hundred twenty
days after the end of each fiscal year of Zhone, a consolidated balance
sheet of Zhone and its Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash flows
of Zhone and its Consolidated Subsidiaries for such fiscal year, all in
reasonable detail and all prepared in accordance with GAAP and accompanied
by a report and opinion of accountants of national standing selected by
Zhone, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any
qualification or exception which BNPLC determines, in BNPLC's reasonable
discretion, is unacceptable;
(ii) as soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of Zhone,
the consolidated balance sheet of Zhone and its Consolidated Subsidiaries
as of the end of such quarter and the consolidated income statement and the
consolidated statement of cash flows of Zhone and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and
all prepared in accordance with GAAP and certified by the chief financial
officer or controller of Zhone (subject to year-end adjustments);
(iii) together with the financial statements furnished in accordance
with subparagraph 13.(a)(i) and13.(a)(ii), a certificate of the chief
financial officer or controller of Zhone: (i) certifying that to the
knowledge of Zhone no Default or Event of Default under this Buildings 1&2
Lease has occurred and is continuing or, if a Default or Event of Default
has occurred and is continuing, a brief statement as to the nature thereof
and the action which is proposed to be taken with respect thereto, (ii)
certifying that the representations of Zhone set forth in the Buildings 1&2
Operative Documents are true and correct in all material respects as of the
date thereof as though made on and as of the date thereof or, if not then
true and correct, a brief statement as to why such representations are no
longer true and correct, and (iii) with computations demonstrating
compliance with the financial covenants contained in Schedule 1;
----------
(iv) within fifteen days after the end of each fiscal quarter of
Zhone, a certificate of the chief financial officer or controller of Zhone
certifying that at the end of the preceding fiscal quarter, Zhone had
sufficient cash and other assets described in Paragraph 1 of Part II of
Schedule 1 to comply with the requirements of that paragraph;
----------
(v) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which Zhone sends to
Zhone's stockholders, and copies of all regular, periodic and special
reports, and all registration statements (other than registration
statements on Form S-8 or any form substituted therefor) which Zhone files
with the Securities and Exchange Commission or any governmental authority
which may be substituted therefor, or with any national securities
exchange;
-29-
(vi) upon request by BNPLC, a statement in writing certifying that
the Buildings 1&2 Operative Documents are unmodified and in full effect
(or, if there have been modifications, that the Buildings 1&2 Operative
Documents are in full effect as modified, and setting forth such
modifications) and the dates to which the Base Rent has been paid and
either stating that to the knowledge of Zhone no Default or Event of
Default under this Buildings 1&2 Lease has occurred and is continuing or,
if a Default or Event of Default under this Buildings 1&2 Lease has
occurred and is continuing, a brief statement as to the nature thereof; it
being intended that any such statement by Zhone may be relied upon by any
prospective purchaser or mortgagee of the Property and by the Participants;
(vii) as soon as possible after, and in any event within ten days
after Zhone becomes aware that, any of the following has occurred, with
respect to which the potential aggregate liability to Zhone relating
thereto is $500,000 or more, a notice signed by a senior financial officer
of Zhone setting forth details of the following and the response, if any,
which Zhone or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or given to
PBGC by Zhone or an ERISA Affiliate with respect to any of the following or
the events or conditions leading up to the following): (A) the assertion,
to secure any Unfunded Benefit Liabilities, of any Lien against the assets
of Zhone, against the assets of any Plan or Multiemployer Plan or against
any interest of BNPLC or Zhone in the Property, or (B) the taking of any
action by the PBGC or any other governmental authority against Zhone to
terminate any Plan of Zhone or any ERISA Affiliate of Zhone or to cause the
appointment of a trustee or receiver to administer any such Plan ; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of Zhone, of any of its Subsidiaries or of the
Property as BNPLC or any Participant through BNPLC may from time to time
reasonably request.
BNPLC is hereby authorized to deliver a copy of any information or certificate
delivered to it pursuant to this subparagraph 13.(a) to BNPLC's Parent, to the
Participants and to any regulatory body having jurisdiction over BNPLC or
BNPLC's Parent or any Participant that requires or requests it.
14. Assignment and Subletting by Zhone.
(a) BNPLC's Consent Required. Without the prior consent of BNPLC,
------------------------
Zhone shall not assign, transfer, mortgage, pledge or hypothecate this Buildings
1&2 Lease or any interest of Zhone hereunder and shall not sublet all or any
part of the Property, by operation of law or otherwise; provided, that subject
to subparagraph 14.(c) below, if (and after) Zhone completes the Construction
Project pursuant to the Buildings 1&2 CMA and so long as no Event of Default has
occurred and is continuing: (1) Zhone shall be entitled to sublet no more than
thirty-three percent (33%) (computed on the basis of square footage) of the
useable space in then existing and completed building Improvements on the Land,
so long as (i) any sublease by Zhone is made expressly subject and subordinate
to the terms hereof and of the Building 3 Lease, and (ii) such sublease has a
term equal to or less than the remainder of the then effective terms of this
Buildings 1&2 Lease and the Building 3 Lease; and (2) Zhone shall be entitled to
assign or transfer this Buildings 1&2 Lease and the Building 3 Lease or any
interest of Zhone hereunder or thereunder to an Affiliate of Zhone if both Zhone
and its Affiliate confirm their joint and several liability hereunder by written
notice given to BNPLC.
(b) Standard for BNPLC's Consent to Assignments and Certain Other
-------------------------------------------------------------
Matters. Consents and approvals of BNPLC which are required by this Paragraph 14
-------
will not be unreasonably withheld or delayed, but Zhone acknowledges that
BNPLC's withholding of such consent or approval shall be reasonable if BNPLC
-30-
determines in good faith that (1) giving the approval may materially increase
BNPLC's risk of liability for any existing or future environmental problem, or
(2) giving the approval is likely to increase BNPLC's administrative burden of
complying with or monitoring Zhone's compliance with the requirements of this
Buildings 1&2 Lease.
(c) Consent Not a Waiver. No consent by BNPLC to a sale, assignment,
--------------------
transfer, mortgage, pledge or hypothecation of this Buildings 1&2 Lease or
Zhone's interest hereunder, and no assignment or subletting of the Property or
any part thereof in accordance with this Buildings 1&2 Lease or otherwise with
BNPLC's consent, shall release Zhone from liability hereunder; and any such
consent shall apply only to the specific transaction thereby authorized and
shall not relieve Zhone from any requirement of obtaining the prior consent of
BNPLC to any further sale, assignment, transfer, mortgage, pledge or
hypothecation of this Buildings 1&2 Lease or any interest of Zhone hereunder.
15. Assignment by BNPLC.
(a) Restrictions on Transfers. Except by a Permitted Transfer, BNPLC
-------------------------
shall not assign, transfer, mortgage, pledge, encumber or hypothecate this
Buildings 1&2 Lease or the other Buildings 1&2 Operative Documents or any
interest of BNPLC in and to the Property during the Term without the prior
consent of Zhone, which consent Zhone may withhold in its sole discretion.
Further, notwithstanding anything to the contrary herein contained, if
withholding taxes are imposed on the rents and other amounts payable to BNPLC
hereunder because of BNPLC's assignment of this Buildings 1&2 Lease to any
citizen of, or any corporation or other entity formed under the laws of, a
country other than the United States, Zhone shall not be required to compensate
BNPLC or any such assignee for the withholding tax. If, in breach of this
subparagraph, BNPLC transfers the Property or any part thereof by a conveyance
or that does not constitute a Permitted Transfer, with the result that
additional transfer taxes or other Impositions are assessed against the Property
or the owner thereof, BNPLC shall be required to pay such additional transfer
taxes or other Impositions.
(b) Effect of Permitted Transfer or other Assignment by BNPLC. If,
---------------------------------------------------------
without breaching subparagraph 15.(a), BNPLC sells or otherwise transfers the
Property and assigns to the transferee all of BNPLC's rights under this
Buildings 1&2 Lease and under the other Operative Documents, and if the
transferee expressly assumes all of BNPLC's obligations under this Buildings 1&2
Lease and under the other Operative Documents, then BNPLC shall thereby be
released from any obligations arising after such assumption under this Buildings
1&2 Lease or under the other Operative Documents (other than any liability for a
breach of any continuing obligation to provide Construction Advances under the
Buildings 1&2 CMA), and Zhone shall look solely to each successor in interest of
BNPLC for performance of such obligations. (As used in this subparagraph,
"Operative Documents" is intended to mean not only the Buildings 1&2 Operative
Documents, but also the Other Operative Documents.)
16. BNPLC's Right of Access.
(a) During the Term, BNPLC and BNPLC's representatives may (subject to
subparagraphs 16.(c) and 16.(d)) enter the Property at any reasonable time after
five Business Days advance written notice to Zhone for the purpose of making
inspections or performing any work BNPLC is authorized to undertake by the next
subparagraph or for the purpose confirming whether Zhone has complied with the
requirements of the Buildings 1&2 Operative Documents and the Other Operative
Documents.
(b) If Zhone fails to perform any act or to take any action required
of it by this Buildings 1&2 Lease or the Closing Certificate, or to pay any
money which Zhone is required by this
-31-
Buildings 1&2 Lease or the Closing Certificate to pay, and if such failure or
action constitutes an Event of Default or renders BNPLC or any director,
officer, employee or Affiliate of BNPLC at risk of criminal prosecution or
renders BNPLC's interest in the Property or any part thereof at risk of
forfeiture by forced sale or otherwise, then in addition to any other remedies
specified herein or otherwise available, BNPLC may, perform or cause to be
performed such act or take such action or pay such money. Any expenses so
incurred by BNPLC, and any money so paid by BNPLC, shall be a demand obligation
owing by Zhone to BNPLC. Further, BNPLC, upon making such payment, shall be
subrogated to all of the rights of the person, corporation or body politic
receiving such payment. But nothing herein shall imply any duty upon the part of
BNPLC to do any work which under any provision of this Buildings 1&2 Lease Zhone
may be required to perform, and the performance thereof by BNPLC shall not
constitute a waiver of Zhone's default. BNPLC may during the progress of any
such work permitted by BNPLC hereunder on or in the Property keep and store upon
the Property all necessary materials, tools, and equipment. BNPLC shall not in
any event be liable for inconvenience, annoyance, disturbance, loss of business,
or other damage to Zhone or the subtenants or invitees of Zhone by reason of
making such repairs or the performance of any such work on or in the Property,
or on account of bringing materials, supplies and equipment into or through the
Property during the course of such work (except for any liability in excess of
the liability insurance limits established in Exhibit B resulting from death or
---------
injury or damage to the property of third parties caused by the Established
Misconduct of BNPLC or its officers, employees, or agents in connection
therewith), and the obligations of Zhone under this Buildings 1&2 Lease shall
not thereby be excused in any manner.
(c) Zhone shall have no obligation to provide proprietary information
(as defined in the next sentence) to BNPLC, except and to the extent that (1)
BNPLC reasonably determines that BNPLC cannot, without evaluating such
information, accomplish the purposes of BNPLC's inspection of the Property or
exercise of other rights granted pursuant to the various express provisions of
the Buildings 1&2 Operative Documents and the Other Operative Documents. For
purposes of this Buildings 1&2 Lease "proprietary information" includes Zhone's
intellectual property, trade secrets and other confidential information of value
to Zhone about, among other things, Zhone's manufacturing processes, products,
marketing and corporate strategies, but in no event will "proprietary
information" include any disclosure of substances and materials (and their
chemical composition) which are or previously have been present in, on or under
the Property at the time of any inspections by BNPLC, nor will "proprietary
information" include any additional disclosures reasonably required to permit
BNPLC to determine whether the presence of such substances and materials has
constituted a violation of Environmental Laws. In addition, under no
circumstances shall Zhone have any obligation to disclose to BNPLC or any other
party any proprietary information of Zhone (including, without limitation, any
pending applications for patents or trademarks, any research and design and any
trade secrets) except if and to the limited extent reasonably necessary to
comply with the express provisions of the Buildings 1&2 Operative Documents and
the Other Operative Documents.
(d) So long as Zhone remains in possession of the Property, BNPLC or
BNPLC's representative will, before making any inspection or performing any work
on the Property authorized by this Buildings 1&2 Lease, if then requested to do
so by Zhone to maintain Zhone's security: (i) sign in at Zhone's security or
information desk if Zhone has such a desk on the premises, (ii) wear a visitor's
badge or other reasonable identification, (iii) permit an employee of Zhone to
observe such inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Zhone that do not, individually or in
the aggregate, significantly interfere with inspections or work of BNPLC
authorized by this Buildings 1&2 Lease.
17. Events of Default. Each of the following events shall be an "Event of
Default" by Zhone under this Buildings 1&2 Lease:
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(a) Zhone shall fail to pay when due any installment of Rent due hereunder
and such failure shall continue for three (3) Business Days after Zhone is
notified in writing thereof.
(b) Zhone shall fail to cause any representation or warranty of Zhone
contained herein or in the Buildings 1&2 CMA or the Closing Certificate that was
false or misleading in any material respect when made to be made true and not
misleading (other than as described in the other clauses of this Paragraph 17),
or Zhone shall fail to comply with any term, provision or covenant of this
Buildings 1&2 Lease or of the Buildings 1&2 CMA or the Closing Certificate
(other than as described in the other clauses of this Paragraph 17), and in
either case shall not cure such failure prior to the earlier of (A) thirty days
after written notice thereof is sent to Zhone or (B) the date any writ or order
is issued for the levy or sale of any property owned by BNPLC (including the
Property) or any criminal prosecution is instituted or overtly threatened
against BNPLC or any of its directors, officers or employees because of such
failure; provided, however, that so long as no such writ or order is issued and
no such criminal prosecution is instituted or overtly threatened, the period
within which such failure may be cured by Zhone shall be extended for a further
period (not to exceed an additional sixty days) as shall be necessary for the
curing thereof with diligence, if (but only if) (x) such failure is susceptible
of cure but cannot with reasonable diligence be cured within such thirty day
period, (y) Zhone shall promptly have commenced to cure such failure and shall
thereafter continuously prosecute the curing thereof with reasonable diligence
and (z) the extension of the period for cure will not, in any event, cause the
period for cure to extend beyond five days prior to the expiration of this
Buildings 1&2 Lease.
(c) Zhone shall abandon the Property.
(d) Zhone or any Subsidiary shall fail to make any payment or payments of
principal, premium or interest, of Debt of Zhone described in the next sentence
when due (taking into consideration the time Zhone may have to cure such
failure, if any, under the documents governing such Debt). As used in this
clause 14(a)(v), "Debt" shall include only Debt (as defined in the Buildings 1&2
CDPA) of Zhone or any of its Subsidiaries now existing or arising in the future
(1) payable to any Interested Party, or (2) payable to any other Person and with
respect to which $5,000,000 or more is actually due and payable because of
acceleration or otherwise.
(e) Zhone: (a) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (b) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (c) shall file any petition or application to
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (d) shall have had any such
petition or application filed against it; or (e) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (f)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty days or more.
(f) One or more final judgments, decrees or orders for the payment of
money in excess of $5,000,000 in the aggregate shall be rendered against Zhone
and such judgments, decrees or orders shall continue unsatisfied and in effect
for a period of thirty consecutive days without Zhone's having obtained an
agreement (or after the expiration or termination of an agreement) of the
Persons entitled to enforce such judgment, decrees or orders not to enforce the
same pending negotiations with Zhone concerning the satisfaction or other
discharge of the same. (For purposes of this provision, no judgment, decree or
order will be considered "final" until Zhone's right to appeal, if any, shall
have expired or been exhausted.)
-33-
(g) Zhone shall breach the requirements of Paragraph 12, which by
reference to Schedule 1 establishes certain financial covenants and other
----------
requirements.
(h) as of the effective date of this Buildings 1&2 Lease, any of the
representations or warranties of Zhone contained in subparagraphs 2(A) - (J) of
the Closing Certificate shall be false or misleading in any material respect.
(i) Zhone shall fail to pay the full amount of any Buildings 1&2
Supplemental Payment required by xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement on the
Designated Sale Date.
(j) Zhone shall fail to comply with any term, provision or condition of
xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx after the expiration of any applicable notice
and cure period set forth in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx.
18. Remedies.
(a) Basic Remedies. At any time after an Event of Default and after
--------------
BNPLC has given any notice required by subparagraph 18.(b), BNPLC shall be
entitled at BNPLC's option (and without limiting BNPLC in the exercise of any
other right or remedy BNPLC may have, and without any further demand or notice
except as expressly described in this subparagraph 18.(a)), to exercise any one
or more of the following remedies:
(i) By notice to Zhone, BNPLC may terminate Zhone's right to
possession of the Property. A notice given in connection with unlawful
detainer proceedings specifying a time within which to cure a default shall
terminate Zhone's right to possession if Zhone fails to cure the default
within the time specified in the notice.
(ii) Upon termination of Zhone's right to possession and without
further demand or notice, BNPLC may re-enter the Property in any manner not
prohibited by Applicable Law and take possession of all improvements,
additions, alterations, equipment and fixtures on the Buildings 1&2 Site
and remove any persons in possession thereof. Any property in the
Improvements on the Buildings 1&2 Site may be removed and stored in a
warehouse or elsewhere at the expense and risk of and for the account of
Zhone.
(iii) Upon termination of Zhone's right to possession, this
Buildings 1&2 Lease shall terminate and BNPLC may recover from Zhone:
a) The worth at the time of award of the unpaid Rent
which had been earned at the time of termination;
b) The worth at the time of award of the amount by
which the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that
Zhone proves could have been reasonably avoided;
c) The worth at the time of award of the amount by
which the unpaid Rent for the balance of the scheduled Term after the
time of award exceeds the amount of such rental loss that Zhone proves
could be reasonably avoided; and
-34-
d) Any other amount necessary to compensate BNPLC for
all the detriment proximately caused by Zhone's failure to perform
Zhone's obligations under this Buildings 1&2 Lease or which in the
ordinary course of things would be likely to result therefrom,
including the costs and expenses (including Attorneys' Fees,
advertising costs and brokers' commissions) of recovering possession
of the Property, removing persons or property therefrom, placing the
Property in good order, condition, and repair, preparing and altering
the Property for reletting, all other costs and expenses of reletting,
and any loss incurred by BNPLC as a result of Zhone's failure to
perform Zhone's obligations under the other Buildings 1&2 Operative
Documents.
The "worth at the time of award" of the amounts referred to in
subparagraph 18.(a)(iii)a) and subparagraph 18.(a)(iii)b) shall be
computed by allowing interest at the Default Rate. The "worth at the
time of award" of the amount referred to in subparagraph 18.(a)(iii)c)
shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus
one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable
California law.
(iv) BNPLC shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in force even after
lessee's breach and abandonment and recover rent as it becomes due, if
lessee has right to sublet or assign, subject only to reasonable
limitations). Accordingly, even if Zhone has breached this Buildings 1&2
Lease and abandoned the Property, this Buildings 1&2 Lease shall continue
in effect for so long as BNPLC does not terminate Zhone's right to
possession, and BNPLC may enforce all of BNPLC's rights and remedies under
this Buildings 1&2 Lease, including the right to recover the Rent as it
becomes due under this Buildings 1&2 Lease. Zhone's right to possession
shall not be deemed to have been terminated by BNPLC except pursuant to
subparagraph 18.(a)(i) hereof. The following shall not constitute a
termination of Zhone's right to possession:
a) Acts of maintenance or preservation or efforts to
relet the Property;
b) The appointment of a receiver upon the initiative
of BNPLC to protect BNPLC's interest under this Buildings 1&2 Lease;
or
c) Reasonable withholding of consent to an assignment
or subletting, or terminating a subletting or assignment by Zhone.
(b) Notice Required So Long As the Purchase Option and the Buildings
----------------------------------------------------------------
1&2 Supplemental Payment Obligation Continue Under xxx Xxxxxxxxx 0&0 Xxxxxxxx
-----------------------------------------------------------------------------
Agreement. So long as Zhone remains in possession of the Property and there has
---------
been no termination of the Purchase Option and Buildings 1&2 Supplemental
Payment Obligation as provided Paragraph 4 of xxx Xxxxxxxxx 0&0 Xxxxxxxx
-----------
Agreement, BNPLC's right to exercise remedies provided in subparagraph 18.(a)
will be subject to the condition precedent that BNPLC shall have notified Zhone,
at a time when an Event of Default shall have occurred and be continuing, of
BNPLC's intent to exercise remedies provided in subparagraph 18.(a) at least
sixty days prior to exercising the remedies. The condition precedent is intended
to provide Zhone with an opportunity to exercise the Purchase Option or Zhone's
Initial Remarketing Rights before losing possession of the Property pursuant to
subparagraph 18.(a). The condition precedent is not, however, intended to extend
any period for curing an Event of Default. Accordingly, if an Event of Default
has occurred, and regardless of whether any Event of Default is
-35-
then continuing, BNPLC may proceed immediately to exercise remedies provided in
subparagraph 18.(a) at any time after the earlier of (i) sixty days after BNPLC
has given such a notice to Zhone, (ii) any date upon which Zhone relinquishes
possession of the Property, or (iii) any termination of the Purchase Option and
the Buildings 1&2 Supplemental Payment Obligation.
(c) Enforceability. This Paragraph 18 shall be enforceable to the
--------------
maximum extent not prohibited by Applicable Law, and the unenforceability of any
provision in this Paragraph shall not render any other provision unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred upon or
-------------------
reserved to BNPLC is intended to be exclusive of any other right or remedy, and
each and every such right and remedy shall be cumulative and in addition to any
other right or remedy given to BNPLC hereunder or now or hereafter existing in
favor of BNPLC under Applicable Law or in equity. In addition to other remedies
provided in this Buildings 1&2 Lease, BNPLC shall be entitled, to the extent
permitted by Applicable Law or in equity, to injunctive relief in case of the
violation, or attempted or threatened violation, of any of the covenants,
agreements, conditions or provisions of this Buildings 1&2 Lease, or to a decree
compelling performance of any of the other covenants, agreements, conditions or
provisions of this Buildings 1&2 Lease to be performed by Zhone, or to any other
remedy allowed to BNPLC at law or in equity. Nothing contained in this Buildings
1&2 Lease shall limit or prejudice the right of BNPLC to prove for and obtain in
proceedings for bankruptcy or insolvency of Zhone by reason of the termination
of this Buildings 1&2 Lease, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing the proceedings
in which, the damages are to be proved, whether or not the amount be greater,
equal to, or less than the amount of the loss or damages referred to above.
Without limiting the generality of the foregoing, nothing contained herein shall
modify, limit or impair any of the rights and remedies of BNPLC under xxx
Xxxxxxxxx 0&0 Xxxxxxxx Documents, and BNPLC shall not be required to give the
sixty day notice described in subparagraph 18.(b) as a condition precedent to
any acceleration of the Designated Sale Date or to taking any action to enforce
xxx Xxxxxxxxx 0&0 Xxxxxxxx Documents.
19. Default by BNPLC. If BNPLC should default in the performance of any of
its obligations under this Buildings 1&2 Lease, BNPLC shall have the time
reasonably required, but in no event less than thirty days, to cure such default
after receipt of notice from Zhone specifying such default and specifying what
action Zhone believes is necessary to cure the default. If Zhone prevails in any
litigation brought against BNPLC because of BNPLC's failure to cure a default
within the time required by the preceding sentence, then Zhone shall be entitled
to an award against BNPLC for the monetary damages proximately caused to Zhone
by such default.
Notwithstanding the foregoing, BNPLC's right to cure as provided in this
Paragraph 19 will not in any event extend the time within which BNPLC must
remove Liens Removable by BNPLC as required by Paragraph 20 beyond the
Designated Sale Date.
20. Quiet Enjoyment. Provided Zhone pays the Base Rent and all Additional
Rent payable hereunder as and when due and payable and keeps and fulfills all of
the terms, covenants, agreements and conditions to be performed by Zhone
hereunder, BNPLC shall not during the Term disturb Zhone's peaceable and quiet
enjoyment of the Property; however, such enjoyment shall be subject to the
terms, provisions, covenants, agreements and conditions of this Buildings 1&2
Lease, to Permitted Encumbrances, to Development Documents and to any other
claims not constituting Liens Removable by BNPLC. If any Lien Removable by
BNPLC is claimed against the Property, BNPLC will remove the Lien Removable by
BNPLC promptly. Any breach by BNPLC of this Paragraph shall render BNPLC liable
to Zhone for any monetary damages proximately
-36-
caused thereby, but as more specifically provided in subparagraph 4.(b) above,
no such breach shall entitle Zhone to terminate this Buildings 1&2 Lease or
excuse Zhone from its obligation to pay Rent.
21. Surrender Upon Termination. Unless Zhone or an Applicable Purchaser
purchases or has purchased BNPLC's entire interest in the Land and Improvements
pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement and the Other Purchase
Agreements, Zhone shall, upon the termination of Zhone's right to occupancy,
surrender to BNPLC the Property, including Improvements on the Buildings 1&2
Site constructed by Zhone and fixtures and furnishings included in the Property,
free of all Hazardous Substances (including Permitted Hazardous Substances) and
tenancies and with all Improvements on the Buildings 1&2 Site in substantially
the same condition as of the date the same were initially completed, excepting
only (i) ordinary wear and tear that occurs between the maintenance, repairs and
replacements required by other provisions of this Buildings 1&2 Lease, and (ii)
demolition, alterations and additions which are expressly permitted by the terms
of this Buildings 1&2 Lease and which have been completed by Zhone in a good and
workmanlike manner in accordance with all Applicable Laws. Any movable furniture
or movable personal property belonging to Zhone or any party claiming under
Zhone, if not removed at the time of such termination and if BNPLC shall so
elect, shall be deemed abandoned and become the property of BNPLC without any
payment or offset therefor. If BNPLC shall not so elect, BNPLC may remove such
property from the Property and store it at Zhone's risk and expense.
Nothing in this Paragraph 21 will be construed to require Zhone to
surrender the Property to BNPLC during the continuation of any breach by BNPLC
of any obligation it has under xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement to convey
the Property to Zhone or an Applicable Purchaser.
22. Holding Over by Zhone. Should Zhone not purchase BNPLC's right, title
and interest in the Property as provided in xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement, but nonetheless continue to hold the Property after the termination
of this Buildings 1&2 Lease without BNPLC's consent, whether such termination
occurs by lapse of time or otherwise, such holding over shall constitute and be
construed as a tenancy from day to day only, at a daily Base Rent equal to: (i)
Stipulated Loss Value on the day in question, times (ii) the Default Rate for
such day; divided by (iii) three hundred and sixty; subject, however, to all of
the terms, provisions, covenants and agreements on the part of Zhone hereunder.
No payments of money by Zhone to BNPLC after the termination of this Buildings
1&2 Lease shall reinstate, continue or extend the Term of this Buildings 1&2
Lease and no extension of this Buildings 1&2 Lease after the termination thereof
shall be valid unless and until the same shall be reduced to writing and signed
by both BNPLC and Zhone.
23. Independent Obligations Evidenced by the other Operative Documents.
Zhone acknowledges and agrees that nothing contained in this Buildings 1&2 Lease
shall limit, modify or otherwise affect any of Zhone's obligations under the
other Buildings 1&2 Operative Documents or the Other Operative Documents, which
obligations are intended to be separate, independent and in addition to, and not
in lieu of, the obligations set forth herein. In the event of any inconsistency
between the express terms and provisions of xxx Xxxxxxxxx 0&0 Xxxxxxxx Documents
and the express terms and provisions of this Buildings 1&2 Lease, the express
terms and provisions of xxx Xxxxxxxxx 0&0 Xxxxxxxx Documents shall control. In
the event of any inconsistency between the express terms and provisions of the
Buildings 1&2 CMA or the Closing Certificate and the express terms and
provisions of this Buildings 1&2 Lease, the express terms and provisions of this
Buildings 1&2 Lease shall control; provided, nothing herein will limit or impair
Zhone's obligations under the Closing Certificate following any expiration of
termination of this Buildings 1&2 Lease.
24. Amendment and Restatement. Together, this Buildings 1&2 Lease and the
Building 3 Lease amend, restate and replace the Prior Lease Agreement referenced
in the recitals at the beginning of this agreement.
-37-
[The signature pages follow.]
-38-
IN WITNESS WHEREOF, Zhone and BNPLC have caused this Lease Agreement
(Improvements - Buildings 1&2) to be executed as of August 1, 2000.
"Zhone"
ZHONE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------
Name: Xxxxx Xxxxxx
------------------------
Title: Corporate Controller
-----------------------
[Continuation of signature pages to Lease Agreement (Improvements - Buildings
1&2) dated to be effective as of August 1, 2000]
"BNPLC"
BNP LEASING CORPORATION
By: /s/ Xxxxx X. Xxx
---------------------------------
Xxxxx X. Xxx, Vice President
Exhibit A
---------
Legal Description
All that certain real property situate in the City of Oakland, State of
California, described as follows:
Being a portion of Lot 12, as shown on Parcel Map No. 6003, filed in Book 205 of
Parcel Maps, at Pages 94 through 98, Alameda County Records, more particularly
described as follows:
Commencing at the most southerly corner of said Lot 12; Thence along the
southwesterly line of said Xxx 00, Xxxxx 00 50' 24" West, 628.68 feet to the
point of beginning; Thence continuing along the southwesterly line of said Xxx
00, Xxxxx 00 50' 24" West, 1029.21 feet; Thence along the southeasterly line of
said Xxx 00, Xxxxx 00 09' 36" West 14.00 feet; Thence along the southwesterly
line of said Xxx 00, Xxxxx 00 50' 24" East, 253.55 feet to the beginning of a
curve, concave southwesterly, having a radius of 392.21 feet; Thence northerly
along the arc of said curve, through a central angle of 3 51' 45", an arc
distance of 26.44 feet to the intersection of a line drawn parallel with and
85.00 feet southeasterly of the northwesterly line of said Lot 12, a radial line
through said point bears North 52 17' 51" East; Thence parallel with the
northwesterly line of said Xxx 00, Xxxxx 00 00' 00" Xxxx, 476.93 feet to a point
that is 5 feet southwesterly of the northeasterly line of said Lot 12; Thence
along a line that is parallel with and 5 feet southwesterly of the said
northeasterly line of Xxx 00, Xxxxx 00 00' 00" Xxxx, 69.44 feet to the beginning
of a curve, concave southwesterly, having a radius of 1949.00 feet; Thence
southeasterly along the arc of said curve, through a central angle of 6 10' 18",
an arc distance of 209.94 feet; Thence continuing along a line that is parallel
with and 5 feet southwesterly of the said northeasterly line of Xxx 00, Xxxxx
0000' 12" East, 1030.61 feet to the intersection with a line drawn perpendicular
with the southwesterly line of said Lot 12, distant thereon 628.68 feet from the
most southerly corner of said Lot 12; Thence southwesterly along said
perpendicular line, South 56 09' 36" West, 480.72 feet to the Point of
Beginning.
The basis of bearings for Parcel Map No. 6003 is the North American Datum of
1983, Xxxx 0, 0000 Xxxxxxxxxx Published in 1986, as shown on Record of Survey
990, filed in Book 18 of Records of Survey, at Pages 50 through 60, Alameda
County Records. All distances in this description are grid distances. To
convert to ground distances, multiply grid distances by 1.0000708.
Assessor's Parcel No. 041-3902-015 (Portion)
[SUBSTITUTE A PAGE COPIED FROM A SURVEY OF THE LAND, MARKED TO SHOW THE
"BUILDINGS 1&2 SITE" HERE.]
Exhibit A- Page 2
Exhibit B
---------
Insurance Requirements
I. LIABILITY INSURANCE:
A. Zhone must maintain commercial general liability ("CGL") insurance on
an occurrence basis, affording immediate protection to the limit of not less
than $20,000,000 combined single limit for bodily and personal injury, death and
property damage in respect of any one occurrence. The CGL insurance must be
primary to, and shall receive no contribution from, any insurance policies or
self-insurance programs otherwise afforded to or available to the Interested
Parties, collectively or individually. Further, the CGL insurance must include
blanket contractual liability coverage which insures contractual liability under
the indemnifications set forth in this Buildings 1&2 Lease (though such coverage
or the amount thereof shall in no way limit such indemnifications).
B. Any deductible or self-insured retention applicable to the CGL
insurance shall not exceed $1,000 at any time when Zhone shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election. After the expiration of Zhone's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by Zhone, Zhone may increase any deductible or self-insured retention
applicable to such insurance, but not to an amount in excess of $500,000.
C. The forms of insurance policies (including endorsements) used to
provide the CGL insurance required by this Buildings 1&2 Lease, and the
insurance company or companies providing the CGL insurance, must be acceptable
to BNPLC. BNPLC shall have the right from time to time and at any time to review
and approve such policy forms (including endorsements) and the insurance company
or companies providing the insurance. Without limiting the generality of the
foregoing, BNPLC may reasonably require (and unless and until Zhone is otherwise
notified by BNPLC, BNPLC does require) that such insurance be provided under
forms and by companies consistent with the following:
(1) Forms: CGL Insurance must be provided on Insurance Services
-----
Office ("ISO") forms CG 0001 1093 or CG 0001 0196 or equivalent
substitute forms providing the same or greater coverage.
(2) Rating Requirements: Insurance must be provided through
-------------------
insurance or reinsurance companies rated by the A.M. Best Company
of Oldwick, New Jersey as having a policyholder's rating of A or
better and a reported financial information rating of X or
better.
(3) Required Endorsements: CGL Insurance must be endorsed to provide
---------------------
or include:
(a) in any policy containing a general aggregate limit, ISO form
amendment "Aggregate Limits of Insurance Per Location" CG 2504
1185 or equivalent substitute form;
(c) a waiver of subrogation, using ISO form CG 2404 1093 or
equivalent substitute form (and under the commercial umbrella, if
any), in favor of "BNP Leasing Corporation and other Interested
Parties (as defined in the Common Definitions and Provisions
Agreement (Improvements - Buildings 1&2) between Zhone
Technologies, Inc. and BNP Leasing Corporation dated August 1,
2000)";
(c) ISO additional insured form CG 2026 1185 or equivalent
substitute form, without modification (and under the commercial
umbrella, if any), designating as additional insureds "BNPLC and
other Interested Parties, as defined in the Common Definitions
and Provisions Agreement (Improvements - Buildings 1&2) between
Zhone Technologies, Inc. and BNP Leasing Corporation dated August
1, 2000)"; and
(d) provisions entitling BNPLC to 30 days' notice from the
insurer prior to any cancellation, nonrenewal or material
modification to the CGL coverage.
(4) Other Insurance: Each policy to contain standard CGL "other
---------------
insurance" wording, unmodified in any way that would make it
excess over or contributory with the additional insured's own
commercial general liability coverage.
II. PROPERTY INSURANCE:
A. Zhone must maintain property insurance in "special form" (including
theft) or against "all risks," providing the broadest available coverage for all
"Improvements" (as defined in the Buildings 1&2 CDPA) on the Buildings 1&2 Site,
but excluding any such Improvements to be demolished by Zhone prior to the
commencement of construction contemplated in the Buildings 1&2 CMA, and for all
equipment included in the Property. Such insurance will be maintained on a
blanket basis if multiple buildings are involved, and will be maintained with no
exclusions for vandalism, malicious mischief, or sprinkler leakage, and
including coverage against earthquake and all coverage perils normally included
within the definitions of extended coverage, vandalism, malicious mischief.
Also, if the Property is in a flood zone, such insurance will include coverage
against flood. In addition, boiler and machinery coverage must be maintained at
all times by endorsement to the property insurance policy or by separate policy.
Also, during any period of significant construction on the Buildings 1&2 Site,
the property insurance must include builder's completed value risk insurance for
the Improvements on the Buildings 1&2 Site, with no protective safeguard
endorsement, and (without limiting the other requirements of this Exhibit)
builder's completed value risk insurance must provide the following coverages:
(1) materials and supplies at other locations awaiting installation;
(2) materials and supplies in transit to the worksite for
installation;
(3) loss of use or consequential loss;
(4) pollutant cleanup and removal;
(5) freezing;
(6) collapse during construction, resulting from fault, defect, error
or omission in design, plan, specification or workmanship;
(7) construction ordinance or law;
Exhibit B - Page 2
(8) mechanical or electrical breakdown;
(9) debris removal additional limit;
(10) preservation of property;
(11) fire department service charge;
(12) additional interest on construction loan due to delays in the
completion of construction;
(13) loss of rental income;
(14) legal/professional fees (in the amount of no less than
$1,500,000) and other soft costs as reasonably determined by
Zhone, subject to BNPLC's approval.
B. The property insurance required hereby must provide coverage in the
amount no less than replacement value (exclusive of land, foundation, footings,
excavations and grading) with endorsements for contingent liability from
operation of building laws, increased cost of construction and demolition costs
which may be necessary to comply with building laws. Subject to the approval of
BNPLC, Zhone will be responsible for determining the amount of property
insurance to be maintained from time to time, but Zhone must maintain such
coverage on an agreed value basis to eliminate the effects of coinsurance.
C. Any deductible or self-insured retention applicable to the property
insurance shall not exceed $50,000 at any time when Zhone shall continue to have
the right to exercise any Issue 97-10 Election, or shall have previously
exercised an Issue 97-10 Election; provided, that with respect to earthquake
coverage the deductible may be as high as five percent of the value of the
Improvements on the Buildings 1&2 Site. After the expiration of Zhone's right to
exercise any Issue 97-10 Election, and provided no Issue 97-10 Election has been
exercised by Zhone, Zhone may increase any deductible or self-insured retention
applicable to such insurance, provided the increased amount shall not exceed (1)
$500,000 for all coverages other than earthquake coverage, and (2) for
earthquake coverage only, five percent of the aggregate amount of the property
insurance required to satisfy this Buildings 1&2 Lease, calculated as described
in the preceding paragraph.
D. The property insurance shall cover not only the value of Zhone's
interest in the Improvements on the Buildings 1&2 Site, but also the interest of
BNPLC, with BNPLC shown as an insured as its interests may appear.
E. The forms of insurance policies (including endorsements) used to
provide the property insurance required by this Buildings 1&2 Lease, and the
insurance company or companies providing the property insurance, must be
acceptable to BNPLC. BNPLC shall have the right from time to time and at any
time to review and approve such policy forms (including endorsements) and the
insurance company or companies providing such insurance. Without limiting the
generality of the foregoing, BNPLC may reasonably require (and unless and until
Zhone is otherwise notified by BNPLC, BNPLC does require) that such insurance be
provided under forms and by companies consistent with the following:
(1) Rating Requirements: Insurance to be provided through insurance
-------------------
or reinsurance companies rated by the A.M. Best Company of Oldwick,
New Jersey as having (a) a policyholder's rating of A or better, (b) a
reported financial information rating of no less than X, and (c) in
the case of each
Exhibit B - Page 3
insurance or reinsurance company, a reported financial information
rating which indicates an adjusted policyholders' surplus equal to or
greater than the underwriting exposure that such company has under the
insurance or reinsurance it is providing for the Property.
(2) Required Endorsements: Zhone's property insurance must be
---------------------
endorsed to provide or include:
(a) a waiver of subrogation in favor of "BNPLC and other
Interested Parties, as defined in the Common Definitions and
Provisions Agreement (Improvements - Buildings 1&2) between
Zhone Technologies, Inc. and BNP Leasing Corporation dated
August 1, 2000)";
(b) that Zhone's insurance is primary, with any policies of
BNPLC or other Interested Parties being excess, secondary
and noncontributing;
(c) that the protection afforded to BNPLC by such insurance
shall not be reduced or impaired by acts or omissions of
Zhone or any other beneficiary or insured; and
(d) that BNPLC must be notified at least thirty days prior to
any cancellation, nonrenewal or reduction of insurance
coverage.
III. OTHER INSURANCE RELATED REQUIREMENTS:
A. BNPLC must be notified in writing immediately by Zhone of claims
against Zhone that might cause a reduction below seventy-five percent (75%) of
any aggregate limit of any policy.
B. Zhone's property insurance must be evidenced by XXXXX form 27
"Evidence of Property Insurance" completed and interlineated in a manner
satisfactory to BNPLC to show compliance with the requirements of this Exhibit.
Copies of endorsements to the property insurance must be attached to such form.
C. Zhone's CGL insurance must be evidenced by XXXXX form 25 "Certificate
of Insurance" completed and interlineated in a manner satisfactory to BNPLC to
show compliance with the requirements of this Exhibit. Copies of endorsements to
the CGL insurance must be attached to such form.
D. Such evidence of required insurance must be delivered upon execution
of this Buildings 1&2 Lease and new certificate or evidence of insurance must be
delivered no later than 10 days prior to expiration of existing policy.
E. Zhone shall not cancel, fail to renew, or make or permit any material
reduction in any of the policies or certificates described in this Exhibit
without the prior written consent of BNPLC. The certificates (XXXXX forms 27 and
25) described in this Exhibit must contain the following express provision:
"This is to certify that the policies of insurance described herein have
been issued to the insured Zhone Technologies, Inc. for whom this
certificate is executed and are in force at this time. In the event of
cancellation, non-renewal, or material reduction in coverage affecting the
certificate holder, at least sixty days prior notice shall be given to the
certificate holder."
Exhibit B - Page 4
F. The limits of liability under the liability insurance required by this
Buildings 1&2 Lease may be provided by a single policy of insurance or by a
combination of primary and umbrella policies, but in no event shall the total
limits of liability available for any one occurrence or accident be less than
those required by this Exhibit.
G. Zhone shall provide copies, certified as complete and correct by an
authorized agent of the applicable insurer, of all insurance policies required
by this Exhibit within ten days after receipt of a request for such copies from
BNPLC.
Exhibit B - Page 5
Exhibit C
---------
Notice of LIBOR Period Election
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Re: Lease Agreement (Improvements - Building 3), Lease Agreement
(Improvements- Buildings 1&2) and Lease Agreement (Land), all dated as of August
1, 2000, and all between Zhone Technologies, Inc., as tenant, and BNP Leasing
Corporation, as landlord
Gentlemen:
Capitalized terms used in this letter are intended to have the meanings
assigned to them in the three Lease Agreements referenced above. This letter
constitutes notice to you that the LIBOR Period Election under all of the Lease
Agreements shall be:
________________ month(s),
beginning with the first Base Rent Period that commences on or after:
______________, ____.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE NUMBER OF MONTHS
----
SPECIFIED ABOVE IS NOT A PERMITTED NUMBER UNDER THE DEFINITION OF "LIBOR PERIOD
ELECTION" IN THE COMMON DEFINITIONS AND PROVISIONS AGREEMENTS REFERENCED IN THE
LEASE AGREEMENTS, OR IF THE DATE SPECIFIED ABOVE CONCERNING THE COMMENCEMENT OF
THE LIBOR PERIOD ELECTION IS LESS THAN TEN BUSINESS DAYS AFTER YOUR RECEIPT OF
THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY US IMMEDIATELY IF FOR ANY REASON
YOU BELIEVE THIS NOTICE IS DEFECTIVE.
Executed this _____ day of ______________, 20___.
Zhone Technologies, Inc.
Name:________________________________
Title:_______________________________
[cc all Participants]
[Improvements - Buildings 1&2]
Schedule 1
----------
FINANCIAL COVENANTS
[DRAFTING NOTE: TK WILL MANUALLY SUBSTITUTE THE FINAL SCHEDULE 1 (A SEPARATE
-------------
WORD PROCESSING FILE) FOR THIS PAGE IN THE EXECUTION COPIES OF THIS DOCUMENT.]
[Improvements - Building 1&2]
COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(IMPROVEMENTS - BUILDINGS 1&2)
between
BNP LEASING CORPORATION
and
ZHONE TECHNOLOGIES, INC.
Dated as of August 1, 2000
TABLE OF CONTENTS
Page
----
ARTICLE I - LIST OF DEFINED TERMS:
Absolute Construction Obligations..................................................................... 1
Acquisition Contract.................................................................................. 2
Active Negligence..................................................................................... 3
Additional Rent....................................................................................... 3
Administrative Agency Fee............................................................................. 3
Advance Date.......................................................................................... 3
Affiliate............................................................................................. 3
Agent................................................................................................. 3
Applicable Laws....................................................................................... 3
Applicable Purchaser.................................................................................. 3
Arrangement Fee....................................................................................... 3
Assumed Conditions Market Value....................................................................... 4
Attorneys' Fees....................................................................................... 4
Balance of Unpaid Construction-Period Indemnity Payments.............................................. 4
Banking Rules Change.................................................................................. 4
Base Rate............................................................................................. 4
Base Rent............................................................................................. 4
Base Rent Date........................................................................................ 4
Base Rent Period...................................................................................... 5
BNPLC................................................................................................. 5
BNPLC's Parent........................................................................................ 5
Breakage Costs........................................................................................ 6
Building 3 Break Even Amount.......................................................................... 6
Building 3 CMA........................................................................................ 6
Building 3 CDPA....................................................................................... 6
Building 3 Cross Default.............................................................................. 6
Building 3 Escrowed Proceeds.......................................................................... 6
Building 3 Lease...................................................................................... 6
Building 3 Operative Documents........................................................................ 7
Building 3 Purchase Agreement......................................................................... 7
Building 3 Pledge Agreement........................................................................... 7
Building 3 Third Party Price.......................................................................... 7
Buildings 1&2 Base Rent Commencement Date............................................................. 7
Buildings 1&2 Break Even Amount....................................................................... 8
Buildings 1&2 CDPA.................................................................................... 8
Buildings 1&2 CMA..................................................................................... 8
Buildings 1&2 Escrowed Proceeds....................................................................... 8
Buildings 1&2 Land Percentage......................................................................... 8
Buildings 1&2 Lease................................................................................... 8
Buildings 1&2 Operative Documents..................................................................... 9
Buildings 1&2 Pledge Agreement........................................................................ 9
Xxxxxxxxx 0&0 Xxxxxxxx Agreement...................................................................... 9
Buildings 1&2 Purchase Documents...................................................................... 9
[Improvements - Building 1&2]
(i)
Page
----
Buildings 1&2 Sale Closing Documents............................................................... 9
Buildings 1&2 Supplemental Payment................................................................. 9
Buildings 1&2 Supplemental Payment Obligation...................................................... 9
Buildings 1&2 Third Party Price.................................................................... 9
Business Day....................................................................................... 9
Capital Adequacy Charges........................................................................... 9
Capital Lease...................................................................................... 10
Carrying Costs..................................................................................... 10
Closing Certificate................................................................................ 10
CMA Suspension Event............................................................................... 10
CMA Suspension Notice.............................................................................. 10
CMA Suspension Period.............................................................................. 10
CMA Termination Event.............................................................................. 10
Code............................................................................................... 10
Collateral......................................................................................... 10
Collateral Percentage.............................................................................. 10
Collateral Test Date............................................................................... 10
Commitment Fees.................................................................................... 10
Completion Notice.................................................................................. 11
Construction Advances.............................................................................. 11
Construction Advance Request....................................................................... 11
Construction Allowance............................................................................. 11
Construction Period................................................................................ 11
Construction-Period Indemnity Payments............................................................. 11
Construction Project............................................................................... 11
Debt............................................................................................... 11
Default............................................................................................ 12
Default Rate....................................................................................... 12
Defaulting Participant............................................................................. 12
Defective Work..................................................................................... 12
Deposit Rate....................................................................................... 12
Deposit Taker...................................................................................... 12
Deposit Taker Losses............................................................................... 12
Designated Sale Date............................................................................... 12
Development Documents.............................................................................. 13
Direct Payments to Participants.................................................................... 13
Effective Date..................................................................................... 13
Effective Rate..................................................................................... 13
Effective Rate/Deposit Rate Difference............................................................. 14
Environmental Laws................................................................................. 14
Environmental Cutoff Date.......................................................................... 14
Environmental Losses............................................................................... 14
Environmental Reports.............................................................................. 14
ERISA.............................................................................................. 15
ERISA Affiliate.................................................................................... 15
Established Misconduct............................................................................. 15
[Improvements - Building 1&2]
(ii)
Page
----
Eurocurrency Liabilities........................................................................... 15
Eurodollar Rate Reserve Percentage................................................................. 15
Event of Default................................................................................... 16
Excluded Taxes..................................................................................... 16
Failed Collateral Test Date........................................................................ 16
Fed Funds Rate..................................................................................... 16
FOCB Notice........................................................................................ 16
Funded Construction Allowance...................................................................... 16
Funding Advances................................................................................... 17
Future Work........................................................................................ 17
GAAP............................................................................................... 17
Hazardous Substance................................................................................ 17
Hazardous Substance Activity....................................................................... 17
Impositions........................................................................................ 17
Improvements....................................................................................... 18
Interested Party................................................................................... 18
Issue 97-1 Non-performance-related Subjective Event of Default..................................... 18
Issue 97-10 Election............................................................................... 18
Issue 97-10 Prepayment............................................................................. 19
Land............................................................................................... 19
Land CDPA.......................................................................................... 19
Land Lease......................................................................................... 19
Land Purchase Agreement............................................................................ 19
Land Pledge Agreement.............................................................................. 19
Landlord's Election to Continue Construction....................................................... 19
Last Building Base Rent Commencement Date.......................................................... 19
LIBOR.............................................................................................. 19
LIBOR Period Election.............................................................................. 20
Lien............................................................................................... 20
Liens Removable by BNPLC........................................................................... 20
Losses............................................................................................. 21
Material Environmental Communication............................................................... 21
Maximum Construction Allowance..................................................................... 21
Maximum Permitted Termination Fees................................................................. 21
Maximum Permitted Prepayment....................................................................... 21
Maximum Remarketing Obligation..................................................................... 21
Minimum Collateral Percentage...................................................................... 22
Minimum Extended Remarketing Price................................................................. 22
Multiemployer Plan................................................................................. 22
Notice of Zhone's Intent to Terminate.............................................................. 22
Other Common Definitions and Provisions Agreements................................................. 22
Other Lease Agreements............................................................................. 22
Other Operative Documents.......................................................................... 22
Other Purchase Agreements.......................................................................... 22
Outstanding Construction Allowance................................................................. 22
Participant........................................................................................ 22
[Improvements - Building 1&2]
(iii)
Page
----
Participation Agreement............................................................................ 22
PBGC............................................................................................... 23
Period............................................................................................. 23
Permitted Encumbrances............................................................................. 23
Permitted Hazardous Substance Use.................................................................. 23
Permitted Hazardous Substances..................................................................... 24
Permitted Transfer................................................................................. 24
Person............................................................................................. 24
Personal Property.................................................................................. 24
Plan............................................................................................... 24
Pre-Commencement Casualty.......................................................................... 24
Prime Rate......................................................................................... 25
Prior Funding Advances............................................................................. 25
Prior Work......................................................................................... 25
Project Costs...................................................................................... 25
Projected Cost Overruns............................................................................ 26
Property........................................................................................... 26
Purchase Option.................................................................................... 26
Qualified Affiliate................................................................................ 26
Qualified Prepayments.............................................................................. 26
Real Property...................................................................................... 27
Reimbursable Construction-Period Costs............................................................. 27
Remedial Work...................................................................................... 27
Rent............................................................................................... 27
Residual Risk Percentage........................................................................... 27
Responsible Financial Officer...................................................................... 27
Scope Change....................................................................................... 27
Secured Spread..................................................................................... 27
Seller............................................................................................. 27
Stipulated Loss Value.............................................................................. 27
Subsidiary......................................................................................... 28
Term............................................................................................... 28
Third Party Contract............................................................................... 28
Third Party Sale Notice............................................................................ 28
Third Party Sale Proposal.......................................................................... 28
Third Party Target Price........................................................................... 28
Unfunded Benefit Liabilities....................................................................... 28
Unsecured Spread................................................................................... 28
Voluntary Zhone Construction Contributions......................................................... 28
Voluntary Retention of the Property................................................................ 28
Work............................................................................................... 28
Zhone.............................................................................................. 28
Zhone's Extended Remarketing Period................................................................ 28
Zhone's Extended Remarketing Right................................................................. 29
Zhone's Initial Remarketing Rights................................................................. 29
[Improvements - Building 1&2]
(iv)
Page
----
ARTICLE II - PROVISIONS USED IN COMMON:
1. Notices....................................................................................... 29
2. Severability.................................................................................. 31
3. No Merger..................................................................................... 31
4. No Implied Waiver............................................................................. 31
5. Entire and Only Agreements.................................................................... 31
6. Binding Effect................................................................................ 32
7. Time is of the Essence........................................................................ 32
8. Governing Law................................................................................. 32
9. Paragraph Headings............................................................................ 32
10. Negotiated Documents.......................................................................... 32
11. Terms Not Expressly Defined in a Buildings 1&2 Operative Document............................. 32
12. Other Terms and References.................................................................... 32
13. Execution in Counterparts..................................................................... 33
14. Not a Partnership, Etc........................................................................ 33
15. Amendment and Restatement..................................................................... 33
[Improvements - Building 1&2]
(v)
COMMON DEFINITIONS
AND PROVISIONS AGREEMENT
(IMPROVEMENTS - BUILDINGS 1&2)
This Common Definitions and Provisions Agreement (Improvements - Buildings
1&2) (this "Buildings 1&2 CDPA"), by and between BNP LEASING CORPORATION, a
Delaware corporation ("BNPLC"), and ZHONE TECHNOLOGIES, INC., a Delaware
corporation ("Zhone"), is dated as of August 1, 2000, the Effective Date.
RECITALS
Contemporaneously with the execution of this Buildings 1&2 CDPA, BNPLC and
Zhone are executing the Closing Certificate (as defined below), the Buildings
1&2 Lease (as defined below), the Buildings 1&2 CMA (as defined below), and xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement (as defined below), all of which concern the
Property (as defined below). Each of the Closing Certificate, the Buildings 1&2
Lease, the Buildings 1&2 CMA and xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement (together
with this Buildings 1&2 CDPA and xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx [as defined
below], the "Buildings 1&2 Operative Documents") are intended to create separate
and independent obligations upon the parties thereto. However, Zhone and BNPLC
intend that all of the Buildings 1&2 Operative Documents share certain
consistent definitions and other miscellaneous provisions. To that end, the
parties are executing this Buildings 1&2 CDPA and incorporating it by reference
into each of the other Buildings 1&2 Operative Documents.
Zhone and BNPLC previously executed that Common Definitions and Provisions
Agreement (Phase I - Improvements) dated January 20, 2000 (the "Prior Common
Definitions and Provisions Agreement"). Zhone and BNPLC have agreed to amend,
restate and replace the Prior Common Definitions and Provisions Agreement with
this Buildings 1&2 CDPA and the Building 3 CDPA as provided in Paragraph 15 of
Article II below.
AGREEMENTS
ARTICLE I - LIST OF DEFINED TERMS
Unless a clear contrary intention appears, the following terms shall have
the respective indicated meanings as used herein and in the other Buildings 1&2
Operative Documents:
"Absolute Construction Obligations" means the following:
(1) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Environmental Losses incurred or suffered
by any Interested Party;
(2) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
BNPLC would not have incurred or suffered but for any act or any omission
of Zhone or of any Zhone's contractors or subcontractors during the period
that the Buildings 1&2 CMA remains in force or during any other period that
Zhone remains in possession or control of the Construction Project
(excluding, however, as described below certain Losses consisting of claims
related to any failure of Zhone to complete the Construction Project);
(3) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any fraud, misapplication of funds
(including the proceeds of Prior Funding Advances and Construction
Advances), illegal acts, or willful misconduct on the part of the Zhone or
its employees or agents or any other party for whom Zhone is responsible;
and
(4) Construction-Period Indemnity Payments required because of or in
connection with or arising out of Losses incurred or suffered by BNPLC that
would not have been incurred but for any bankruptcy proceeding involving
Zhone.
For purposes of clause (2) of this definition, "acts and omissions of Zhone"
shall include (i) any decision by Zhone to make a Scope Change without the prior
approval of BNPLC, (ii) any failure of Zhone to maintain insurance required by
the Buildings 1&2 Lease or the Xxxxxxxxx 0&0 XXX, (xxx) any decision not to
continue or complete Work under the Buildings 1&2 CMA because of a change in
Zhone's facility needs or in Zhone's plans to meet its facility needs (such as,
for example, a decision by Zhone to lease or acquire another less expensive
facility as an alternative to Improvements on the Buildings 1&2 Site), (iv) any
failure of Zhone to reserve termination rights in Third Party Contracts as
described in subparagraph 1(A)(2)(b) of the Buildings 1&2 CMA, and (v) any other
-----------------------
breach by Zhone of xxx Xxxxxxxxx 0&0 XXX.
Thus, for example, if a third party asserts a claim for damages against BNPLC
because of injuries the third party sustained while on the on the Buildings 1&2
Site as a result of Zhone's breach of its obligation under the Buildings 1&2 CMA
to keep the Buildings 1&2 Site and the Improvements thereon in a reasonably safe
condition as Work progresses under Zhone's direction and control, then any
Construction-Period Indemnity Payment required because of such third party claim
will constitute an Absolute Construction Obligation under clause (2) of this
definition. Similarly, if a claim against BNPLC by a third party injured on the
Buildings 1&2 Site during the progress of the Work is uninsured or under-insured
only because of Zhone's failure to obtain liability insurance in accordance with
the requirements of the Buildings 1&2 Lease (the premiums for which insurance
are reimbursable from Construction Advances as provided in the Buildings 1&2
CMA), then Construction-Period Indemnity Payments to BNPLC for the uninsured or
under-insured Losses arising out of the third party claim will constitute
Absolute Construction Obligations under clause (2) of this definition.
It is understood, however, that a failure of Zhone to complete construction of
the Construction Project will not necessarily constitute a breach of the
Buildings 1&2 CMA, given that Zhone may elect to terminate the Buildings 1&2 CMA
as provided in subparagraph 4(D) thereof. In the event the Buildings 1&2 CMA is
-----------------
terminated by Zhone pursuant to subparagraph 4(D) thereof or by BNPLC pursuant
-----------------
to subparagraph 4(E) thereof, clause (2) of this definition will not be
-----------------
construed to include Construction-Period Indemnity Payments, the sole reason for
which are Losses suffered by BNPLC consisting of claims related to Zhone's
failure to complete the Construction Project.
"Acquisition Contract" means the Purchase and Sale Agreement executed on or
about the Effective Date, between Seller and Zhone covering the Land described
in Exhibit A attached to the Buildings 1&2 Lease, the interests of Zhone therein
---------
having being assigned to BNPLC pursuant to the assignment dated as of the
Effective Date between Zhone and BNPLC, with the consent and approval of Seller.
"Active Negligence" of any Person (including BNPLC) means, and is limited
to, the negligent conduct on the Property (and not mere omissions) by such
Person or by others acting and authorized to act on such Person's behalf in a
manner that proximately causes actual bodily injury or property damage for which
Zhone does not carry (and is not obligated by the Buildings 1&2 Lease to carry)
insurance. "Active Negligence" shall not include (1) any negligent failure of
BNPLC to act when the duty to act would not have been imposed but for
Common Definitions and Provisions Agreements Agreement
(Improvements - Buildings 3) - Page 2
BNPLC's status as owner of the Land, the Improvements or any interest in any
other Property or as a party to the transactions described in any of the
Buildings 1&2 Operative Documents or the Other Operative Documents, (2) any
negligent failure of any other Interested Party to act when the duty to act
would not have been imposed but for such party's contractual or other
relationship to BNPLC or participation or facilitation in any manner, directly
or indirectly, of the transactions described in any of the Buildings 1&2
Operative Documents or the Other Operative Documents, or (3) the exercise in a
lawful manner by BNPLC (or any party lawfully claiming through or under BNPLC)
of any right or remedy provided in or under any of the Buildings 1&2 Operative
Documents or the Other Operative Documents.
"Additional Rent" shall have the meaning assigned to it in subparagraph
------------
3.(d) of xxx Xxxxxxxxx 0&0 Xxxxx.
-----
"Administrative Agency Fee" shall have the meaning assigned to it in
subparagraph 3 (g) of xxx Xxxxxxxxx 0&0 Xxxxx.
------------------
"Advance Date" means, regardless of whether any Construction Advance shall
actually be made thereon, the first Business Day of every calendar month,
beginning with the first Business Day in September, 2000 and continuing
regularly thereafter to and including xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement
Date.
"Affiliate" of any Person means any other Person controlling, controlled by
or under common control with such Person. For purposes of this definition, the
term "control" when used with respect to any Person means the power to direct
the management of policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means the Person acting as "Agent" for BNPLC and Participants under
(and as defined in) xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx from time to time.
"Applicable Laws" means any or all of the following, to the extent
applicable to Zhone or the Property or the Buildings 1&2 Lease or the other
Buildings 1&2 Operative Documents: restrictive covenants; zoning ordinances and
building codes; flood disaster laws; health, safety and environmental laws and
regulations; the Americans with Disabilities Act and other laws pertaining to
disabled persons; and other laws, statutes, ordinances, rules, permits,
regulations, orders, determinations and court decisions.
"Applicable Purchaser" means any third party designated by Zhone to
purchase BNPLC's interest in the Property and in any Buildings 1&2 Escrowed
Proceeds as provided in xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
"Arrangement Fee" shall have the meaning assigned to it in subparagraph
------------
3.(e) of xxx Xxxxxxxxx 0&0 Xxxxx.
-----
"Assumed Conditions Market Value" shall have the meaning assigned to it in
subparagraph 1(B)(2)(a) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------------
"Attorneys' Fees" means the expenses and reasonable fees of counsel to the
parties incurring the same, excluding costs or expenses of in-house counsel
(whether or not accounted for as general overhead or administrative expenses),
but otherwise including printing, photostating, duplicating and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and
others not admitted to the bar but
Common Definitions and Provisions Agreement (Improvements - Building 3) - Page 3
performing services under the supervision of an attorney. Such terms shall also
include all such fees and expenses incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any manner of
proceeding is brought with respect to the matter for which such fees and
expenses were incurred.
"Balance of Unpaid Construction-Period Indemnity Payments" shall have the
meaning assigned to it in subparagraph 1(B)(1) of xxx Xxxxxxxxx 0&0 Xxxxxxxx
--------------------
Agreement.
"Banking Rules Change" means either: (1) the introduction of or any change
in any law or regulation applicable to BNPLC, BNPLC's Parent or any other
Participant, or in the generally accepted interpretation by the institutional
lending community of any such law or regulation, or in the interpretation of any
such law or regulation asserted by any regulator, court or other governmental
authority (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) or (2) the
compliance by BNPLC, BNPLC's Parent or any other Participant with any new
guideline or new request from any central bank or other governmental authority
(whether or not having the force of law).
"Base Rate" for any Construction Period or Base Rent Period means a rate
equal to the higher of (1) the Prime Rate in effect on the first day of such
period, or (2) the rate which is fifty basis points (50/100 of 1%) above the Fed
Funds Rate for that period.
"Base Rent" means the rent payable by Zhone pursuant to subparagraph 3.(a)
------------------
of xxx Xxxxxxxxx 0&0 Xxxxx.
"Base Rent Date" means a date upon which Base Rent must be paid under the
Buildings 1&2 Lease, all of which dates shall be the first Business Day of a
calendar month. The first Base Rent Date shall be determined as follows:
a) If a LIBOR Period Election of one month is in effect on the
Buildings 1&2 Base Rent Commencement Date, then the first Business Day
of the first calendar month following the Buildings 1&2 Base Rent
-----
Commencement Date shall be the first Base Rent Date.
b) If the LIBOR Period Election in effect on the Buildings 1&2
Base Rent Commencement Date is three months or six months, then the
first Business Day of the third calendar month following the Buildings
-----
1&2 Base Rent Commencement Date shall be the first Base Rent Date.
Each successive Base Rent Date after the first Base Rent Date shall be the first
Business Day of the first or third calendar month following the calendar month
which includes the preceding Base Rent Date, determined as follows:
(1) If a LIBOR Period Election of one month is in effect on a
Base Rent Date, then the first Business Day of the first calendar
-----
month following such Base Rent Date shall be the next following Base
Rent Date.
(2) If a LIBOR Period Election of three months or six months is
in effect on a Base Rent Date, then the first Business Day of the
third calendar month following such Base Rent Date shall be the next
-----
following Base Rent Date.
Common Definitions and Provisions Agreement (Improvements-Building 3) - Page 4
Thus, for example, if xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date falls on the
first Business Day of September, 2000 and a LIBOR Period Election of two months
commences on the Buildings 1&2 Base Rent Commencement Date, then the first Base
Rent Date shall be the first Business Day of November, 2000.
"Base Rent Period" means a period for which Base Rent must be paid under
the Buildings 1&2 Lease, each of which periods shall correspond to the LIBOR
Period Election for such period. The first Base Rent Period shall begin on and
include the Buildings 1&2 Base Rent Commencement Date, and each successive Base
Rent Period shall begin on and include the Base Rent Date upon which the
preceding Base Rent Period ends. Each Base Rent Period, including the first
Base Rent Period, shall end on but not include the first or second Base Rent
Date after the Base Rent Date upon which such period began, determined as
follows:
(1) If the LIBOR Period Election for a Base Rent Period is one
month or three months, then such Base Rent Period shall end on the
first Base Rent Date after the Base Rent Date upon which such period
-----
began.
(2) If the LIBOR Period Election for a Base Rent Period is six
months, then such Base Rent Period shall end on the second Base Rent
------
Date after the Base Rent Date upon which such period began.
The determination of Base Rent Periods can be illustrated by two examples:
1) If Zhone makes a LIBOR Period Election of three months for a
hypothetical Base Rent Period beginning on the first Business Day in
January, 2002, then such Base Rent Period will end on but not include
the first Base Rent Date after it begins; that is, such Base Rent
Period will end on the first Business Day in April, 2002, the third
calendar month after January, 2002.
2) If, however, Zhone makes a LIBOR Period Election of six
months for the hypothetical Base Rent Period beginning the first
Business Day in January, 2002, then such Base Rent Period will end on
but not include the second Base Rent Date after it begins; that is,
the first Business Day in July, 2002.
"BNPLC" means BNP Leasing Corporation, a Delaware corporation.
"BNPLC's Parent" means BNPLC's Affiliate, BNP Paribas, a bank organized and
existing under the laws of France and any successors of such bank.
"Breakage Costs" means any and all costs, losses or expenses incurred or
sustained by BNPLC's Parent (as a Participant or otherwise) or any other
Participant, for which BNPLC's Parent or the Participant shall request
reimbursement from BNPLC, because of the resulting liquidation or redeployment
of deposits or other funds:
(1) used to make or maintain Funding Advances upon application of a
Qualified Prepayment or upon any sale of the Property pursuant to xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement, if such application or sale occurs on any
day other than the last day of a Construction Period or Base Rent Period;
or
(2) reserved to provide a Construction Advance that Zhone requests,
but thereafter declines to take for any reason, or that Zhone requests but
is not permitted to take because of its failure to satisfy any of the
conditions specified in xxx Xxxxxxxxx 0&0 XXX; or
Common Definitions and Provisions Agreement (Improvements - Building 3) - Page 5
(3) used to make or maintain Funding Advances upon the acceleration of
the end of any Base Rent Period pursuant subparagraph 3.(c)(iii) of the
-----------------------
Buildings 1&2 Lease.
Breakage Costs will include, for example, losses attributable to any decline in
LIBOR as of the effective date of any application described in the clause (1)
preceding, as compared to LIBOR used to determine the Effective Rate then in
effect. Each determination by BNPLC's Parent or the applicable Participant of
Breakage Costs shall, in the absence of clear and demonstrable error, be
conclusive and binding upon Zhone.
"Building 3 Break Even Amount" shall have the meaning assigned to it in the
Building 3 Purchase Agreement.
"Building 3 CMA" means the Construction Management Agreement (Building 3)
dated as of the Effective Date between BNPLC and Zhone, as such agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"Building 3 CDPA" means the Common Definitions and Provisions Agreement
(Improvements - Building 3), dated as of the Effective Date between BNPLC and
Zhone, as such agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.
"Building 3 Cross Default" means an Event of Default under subparagraphs
-------------
17(d) or 17(f) of the Buildings 1&2 Lease that results solely from Zhone's
--------------
failure to make a payment required by the Building 3 Lease, the Building 3
Purchase Agreement or the Building 3 Pledge Agreement. Except as provided in
subparagraph 1(A)(3) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement, the
--------------------
characterization of any Event of Default as a Building 3 Cross Default will not
affect the rights or remedies available to BNPLC because of the Event of
Default.
"Building 3 Escrowed Proceeds" shall have the meaning assigned to it in the
Building 3 CDPA.
"Building 3 Lease" means the Lease Agreement (Improvements - Building 3)
dated as of the Effective Date between BNPLC, as landlord, and Zhone, as tenant,
pursuant to which Zhone has agreed to lease BNPLC's interest in the Improvements
on the Land other than the Buildings 1&2 Site, as such agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"Building 3 Operative Documents" means the Closing Certificate, the
Building 3 Lease, the Xxxxxxxx 0 XXX, xxx Xxxxxxxx 0 Xxxxxxxx Agreement, the
Xxxxxxxx 0 Xxxxxx Xxxxxxxxx xxx xxx Xxxxxxxx 0 XXXX.
"Building 3 Purchase Agreement" means the Purchase Agreement (Improvements
- Building 3) dated as of the Effective Date between BNPLC and Zhone, as such
agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"Building 3 Pledge Agreement" means the Pledge Agreement (Improvements -
Buildings 1&2) dated as of the Effective Date between BNPLC and Zhone, as such
agreement may be extended, supplemented, amended, restated or otherwise modified
from time to time in accordance with its terms.
"Building 3 Third Party Price" shall have the meaning assigned to it in
subparagraph 1(B)(2) of the Xxxxxxxx 0 Xxxxxxxx Xxxxxxxxx.
--------------------
Common Definitions and Provisions Agreement (Improvements - Building 3) - Page 6
"Buildings 1&2 Base Rent Commencement Date" means the earlier of (1) the
first Business Day of August, 2001, (2) the first Business Day of the first
calendar month to follow by twenty days or more the day upon which any
Completion Notice is given, or (3) the first Business Day of the first calendar
month upon which the Funded Construction Allowance shall equal or exceed the
Maximum Construction Allowance. For example, if on the first Business Day of
November, 2000 construction of the Construction Project is continuing, the
Funded Construction Allowance is $29,190,000 (before adding any Carrying Costs
for the preceding month) and the Maximum Construction Allowance is $29,200,000,
and if Carrying Costs of $17,500 would be added to the Funded Construction
Allowance on such day if the Construction Allowance were not limited to the
Maximum Construction Allowance, then (absent an extension by BNPLC as described
below) such day shall be xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date and on
such day $10,000 will be added to the Funded Construction Allowance as Carrying
Cost and $7,500 will be payable as Base Rent pursuant to subparagraph 3.(c)(i)
---------------------
of xxx Xxxxxxxxx 0&0 Xxxxx. Notwithstanding the forgoing, if for any reason
(including a termination of xxx Xxxxxxxxx 0&0 XXX) Xxxxx has not completed the
Construction Project thirty days in advance of the scheduled Buildings 1&2 Base
Rent Commencement Date determined pursuant to the first sentence of this
definition, BNPLC shall be entitled (but not obligated) to extend xxx Xxxxxxxxx
0&0 Xxxx Rent Commencement Date one or more times and at any time before the
Construction Project actually is complete and ready for occupancy. To so extend
xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date, BNPLC shall notify Zhone thereof
and of the date to which xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date is
extended, which may be the first Business Day of any calendar month designated
by BNPLC in the notice of extension, provided that BNPLC will not so designate
any date more than sixty days after the date upon which the Construction Project
is expected by BNPLC (at the time of the designation) to be complete.
(The parties acknowledge that the date designated in clause (1) of the
preceding definition is less than 364 days after the date of the actual
execution of the Buildings 1&2 Operative Documents and thus BNPLC's commitment
to make Construction Advances on and subject to the terms of the Buildings 1&2
CMA and Buildings 1&2 Lease is effectively a commitment of less than 364 days.
The calculation of Commitment Fees reflects this understanding.)
"Buildings 1&2 Break Even Amount" shall have the meaning assigned to it in
subparagraph 1(B)(1) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
"Buildings 1&2 CDPA" means this Agreement, which is incorporated by
reference into each of the other Buildings 1&2 Operative Documents.
"Xxxxxxxxx 0&0 XXX" means the Construction Management Agreement (Buildings
1&2) dated as of the Effective Date between BNPLC and Zhone, as such agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms.
"Buildings 1&2 Escrowed Proceeds" means, subject to the exclusions
specified in the next sentence, any money that is received by BNPLC from time to
time during the Term (and any interest earned thereon) from any party (1) under
any property insurance policy as a result of damage to the Property, (2) as
compensation for any restriction imposed by any governmental authority upon the
use or development of the Property or for the condemnation of the Property or
any portion thereof, (3) because of any judgment, decree or award for physical
damage to the Property or (4) as compensation under any title insurance policy
or otherwise as a result of any title defect or claimed title defect with
respect to the Property; provided, however, in determining the amount of
"Buildings 1&2 Escrowed Proceeds" there shall be deducted all expenses and costs
of every type, kind and nature (including Attorneys' Fees) incurred by BNPLC to
collect such proceeds.
Common Definitions and Provisions Agreement (Improvements - Building 3) - Page 7
Notwithstanding the foregoing, "Buildings 1&2 Escrowed Proceeds" will not
include (A) any payment to BNPLC by a Participant or an Affiliate of BNPLC that
is made to compensate BNPLC for the Participant's or Affiliate's share of any
Losses BNPLC may incur as a result of any of the events described in the
preceding clauses (1) through (4), (B) any money or proceeds that have been
applied as a Qualified Prepayment or to pay any Breakage Costs or other costs
incurred in connection with a Qualified Prepayment, (C) any money or proceeds
that, after no less than ten days notice to Zhone, BNPLC returns or pays to a
third party because of BNPLC's good faith belief that such return or payment is
required by law, (D) any money or proceeds paid by BNPLC to Zhone or offset
against any amount owed by Zhone, or (E) any money or proceeds used by BNPLC in
accordance with the Buildings 1&2 Lease for repairs or the restoration of the
Property or to obtain development rights or the release of restrictions that
will inure to the benefit of future owners or occupants of the Property. Until
Buildings 1&2 Escrowed Proceeds are paid to Zhone pursuant to Paragraph 10 of
------------
the Buildings 1&2 Lease, transferred to a purchaser under xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement as therein provided or applied as a Qualified Prepayment or
as otherwise described in the preceding sentence, BNPLC shall keep the same
deposited in one or more interest bearing accounts, and all interest earned on
such account shall be added to and made a part of Buildings 1&2 Escrowed
Proceeds.
"Buildings 1&2 Land Percentage" means 50%, which is the approximate
percentage of the total acreage of the Land that, according to Zhone, is
properly allocated to the Improvements covered by the Buildings 1&2 Lease (in
contrast to the portion of the Land properly allocated to the Improvements
covered by the Building 3 Lease.
"Buildings 1&2 Lease" means the Lease Agreement (Improvements - Buildings
1&2) dated as of the Effective Date between BNPLC, as landlord, and Zhone, as
tenant, pursuant to which Zhone has agreed to lease BNPLC's interest in the
Property, as such agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.
"Buildings 1&2 Operative Documents" means the Closing Certificate, the
Buildings 1&2 Lease, the Buildings 1&2 CMA, xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement, the Buildings 1&2 Pledge Agreement and this Xxxxxxxxx 0&0 XXXX.
"Buildings 1&2 Pledge Agreement" means the Pledge Agreement (Improvements -
Buildings 1&2) dated as of the Effective Date among BNPLC, Zhone, BNP Paribas
and Xxxxx Fargo Bank, N.A. (pursuant to which Zhone may pledge certificates of
deposit as security for Zhone's obligations under xxx Xxxxxxxxx 0&0 Xxxxxxxx
Agreement and for the corresponding obligations of BNPLC to the Participants
under the Participation Agreement), as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"Buildings 1&2 Purchase Agreement" means the Purchase Agreement
(Improvements - Buildings 1&2) dated as of the Effective Date between BNPLC and
Zhone, as such agreement may be extended, supplemented, amended, restated or
otherwise modified from time to time in accordance with its terms.
"Buildings 1&2 Purchase Documents" means collectively (1) xxx Xxxxxxxxx 0&0
Xxxxxxxx Agreement, (2) the Memorandum of Purchase Agreement (Buildings 1&2)
executed by BNPLC and Zhone as of the Effective Date and recorded to provide
notice of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement; and (3) xxx Xxxxxxxxx 0&0 Xxxxxx
Xxxxxxxxx and all financing statements, notices, acknowledgments and
certificates of deposit executed or delivered from time to time by Zhone, BNPLC
or the other parties to xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx pursuant to and as
expressly provided therein.
Common Definition and Provisions Agreement (Improvements - Building 3) - Page 8
"Buildings 1&2 Sale Closing Documents" shall have the meaning assigned to
it in subparagraph 1(C) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Buildings 1&2 Supplemental Payment" shall have the meaning assigned to it
in subparagraph 1(A)(3) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
"Buildings 1&2 Supplemental Payment Obligation" shall have the meaning
assigned to it in subparagraph 1(A)(3) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
"Buildings 1&2 Third Party Price" shall have the meaning assigned to it in
subparagraph 1(B)(2) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
"Business Day" means any day that is (1) not a Saturday, Sunday or day on
which commercial banks are generally closed or required to be closed in New York
City, New York or San Francisco, California, and (2) a day on which dealings in
deposits of dollars are transacted in the London interbank market; provided that
if such dealings are suspended indefinitely for any reason, "Business Day" shall
mean any day described in clause (1).
"Capital Adequacy Charges" means any additional amounts BNPLC's Parent or
any other Participant requests BNPLC to pay as compensation for an increase in
required capital as provided in subparagraph 5.(b)(ii) of the Buildings 1&2
----------------------
Lease.
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP or for federal income tax
purposes.
"Carrying Costs" means the charges added to and made a part of the
Outstanding Construction Allowance (and thus also added to and made a part of
the Funded Construction Allowance) from time to time on and before the Buildings
1&2 Base Rent Commencement Date pursuant to and as more particularly described
in subparagraph 6.(a) of xxx Xxxxxxxxx 0&0 Xxxxx.
------------------
"Closing Certificate" means the Closing Certificate and Agreement dated as
of Effective Date between Zhone and BNPLC, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"CMA Suspension Event" shall have the meaning assigned to it in
subparagraph 4(A) of the Buildings 1&2 CMA.
-----------------
"CMA Suspension Notice" shall have the meaning assigned to it in
subparagraph 4(B)(1) of the Buildings 1&2 CMA.
--------------------
"CMA Suspension Period" shall have the meaning assigned to it in
subparagraph 4(C) of the Buildings 1&2 CMA.
-----------------
"CMA Termination Event" shall have the meaning assigned to it in
subparagraph 4(B)(3) of the Buildings 1&2 CMA.
--------------------
"Code" means the Internal Revenue Code of 1986, as amended.
Common Definitions and Provisions Agreement (improvements - Building 3) - Page 9
"Collateral" shall have the meaning assigned to it in xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx.
"Collateral Percentage" for each Base Rent Period means the Collateral
Percentage for such period determined under (and as defined in) xxx Xxxxxxxxx
0&0 Xxxxxx Xxxxxxxxx; provided, however, for purposes of the Buildings 1&2
Lease, the Collateral Percentage for any Base Rent Period shall not exceed a
fraction; the numerator of which fraction shall equal the value (determined as
provided in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx) of all Collateral (a) that is,
on the first day of such period, held by the Deposit Takers under (and as
defined in) xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx subject to a Qualifying Security
Interest (as defined below), (b) that is free from claims or security interests
held or asserted by any third party, and (c) that is not in excess of Stipulated
Loss Value; and the denominator of which fraction shall equal the Stipulated
Loss Value on the first day of such period. "Qualifying Security Interest"
means a first priority perfected security interest under xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx.
"Collateral Test Date" shall have the meaning assigned to it in Part I of
Schedule 1 attached to the Buildings 1&2 Lease and to the Buildings 1&2 Pledge
----------
Agreement.
"Commitment Fees" shall have the meaning assigned to it in subparagraph
------------
3.(f) of xxx Xxxxxxxxx 0&0 Xxxxx.
-----
"Completion Notice" means (1) a notice required by subparagraph 1(B) of the
-----------------
Xxxxxxxxx 0&0 XXX from Zhone to BNPLC, advising BNPLC when construction of the
Construction Project is substantially complete, or (2) a notice permitted by
subparagraph 6.(g) of the Buildings 1&2 Lease from BNPLC to Zhone, advising
------------------
Zhone after any Landlord's Election to Complete Construction when construction
of the Construction Project is substantially complete or that BNPLC no longer
intends to continue such construction.
"Construction Advances" means (1) actual advances of funds made by or on
behalf of BNPLC to or on behalf of Zhone pursuant to Paragraph 2 of the
-----------
Buildings 1&2 CMA, and (2) amounts considered as Construction Advances pursuant
to subparagraph 6.(e) of xxx Xxxxxxxxx 0&0 Xxxxx.
------------------
"Construction Advance Request" shall have the meaning assigned to it in
subparagraph 2(C)(1) of the Buildings 1&2 CMA.
--------------------
"Construction Allowance" means the allowance, consisting of Construction
Advances and Carrying Costs, which is to be provided for the Construction
Project as more particularly described in xxx Xxxxxxxxx 0&0 XXX and Paragraph 6
-----------
of xxx Xxxxxxxxx 0&0 Xxxxx.
"Construction Period" means each successive period of approximately one
month, with the first Construction Period beginning on and including the
Effective Date and ending on but not including the first Advance Date. Each
successive Construction Period after the first Construction Period shall begin
on and include the day on which the preceding Construction Period ends and shall
end on but not include the next following Advance Date, until the last
Construction Period, which shall end on but not include the earlier of the
Buildings 1&2 Base Rent Commencement Date or any Designated Sale Date upon which
Zhone or any Applicable Purchaser shall purchase BNPLC's interest in the
Property pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
"Construction-Period Indemnity Payments" shall have the meaning assigned to
it in subparagraph 5.(d)(ii) of xxx Xxxxxxxxx 0&0 Xxxxx.
----------------------
Common Definitions and Provisios Agreement (Improvements - Building 3) - Page 10
"Construction Project" means the buildings or other substantial
Improvements under construction or to be constructed on the Buildings 1&2 Site
as described generally in Exhibit B attached to the Buildings 1&2 CMA.
---------
"Debt" of any Person means (without duplication of any item): (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such Person
for the deferred purchase price of property or services (except trade payables
and accrued expenses constituting current liabilities in the ordinary course of
business); (c) the face amount of any outstanding letters of credit issued for
the account of such Person; (d) obligations of such Person arising under
acceptance facilities; (e) guaranties, endorsements (other than for collection
in the ordinary course of business) and other contingent obligations of such
Person to purchase, to provide funds for payment, to provide funds to invest in
any Person, or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; (g) obligations of such
Person as lessee under Capital Leases; and (h) the obligations of such Person,
contingent or otherwise, under any "synthetic" or other lease of property or
related documents (including a separate purchase agreement) which obligate such
Person or any of its Affiliates (whether by purchasing or causing another Person
to purchase any interest in the leased property or otherwise) to guarantee a
minimum residual value of the leased property to the lessor. For purposes of
this definition, the amount of the obligations described in clause (h) of the
preceding sentence with respect to any lease classified according to GAAP as an
"operating lease," shall equal the sum of (1) the present value of rentals and
other minimum lease payments required in connection with such lease [calculated
in accordance with SFAS 13 and other GAAP relevant to the determination of the
whether such lease must be accounted for as an operating lease or capital
lease], plus (2) the fair value of the property covered by the lease; provided,
however, that such amount shall not exceed the price, as of the date a
determination of Debt is required hereunder, for which the lessee can purchase
the leased property pursuant to any valid ongoing purchase option if, upon such
a purchase, the lessee shall be excused from paying rentals or other minimum
lease payments that would otherwise accrue after the purchase.
"Default" means any event which, with the passage of time or the giving of
notice or both, would (if not cured within any applicable cure period)
constitute an Event of Default.
"Default Rate" means, for any period prior to the Designated Sale Date, a
floating per annum rate equal to two percent (2%) above the Prime Rate, and for
any period commencing on or after the Designated Sale Date, Default Rate shall
mean a floating per annum rate equal to five percent (5%) above the Prime Rate.
However, in no event will the "Default Rate" at any time exceed the maximum
interest rate permitted by law.
"Defaulting Participant" shall have the meaning assigned to it in Section 1
---------
of the Participation Agreement.
"Defective Work" shall have the meaning assigned to it in subparagraph
------------
1(A)(2)(f) of xxx Xxxxxxxxx 0&0 XXX.
----------
"Deposit Rate" means, for any Construction Period or Base Rent Period, the
rate computed by subtracting (1) twelve and one-half basis points (12.5/100 of
1%), from (2) LIBOR for such period.
"Deposit Taker" shall have the meaning assigned to it in xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx.
"Deposit Taker Losses" shall have the meaning assigned to it in xxx
Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx.
"Designated Sale Date" means the earlier of:
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 11
(1) the first Business Day of August, 2005; or
(2) any Business Day designated as the "Designated Sale Date" under
(and as defined in) this Buildings 1&2 CDPA and the Other Common
Definitions and Provisions Agreements in an irrevocable, unconditional
notice given by Zhone to BNPLC; provided, that any such notice will be
effective for purposes of this definition only if its satisfies all of the
following conditions:
(A) the notice must designate a Business Day as the Designated
Sale Date that is at least thirty days after the date of BNPLC's
receipt of such notice;
(B) the notice must be given before Zhone has made any Issue 97-
10 Election under (and as defined in) the Buildings 1&2 Operative
Documents or any Issue 97-10 Election under (and as defined in) the
Other Operative Documents;
(C) the notice must include an express, unconditional,
unequivocal and irrevocable (i) waiver by Zhone of any remaining right
Zhone may have to make any such Issue 97-10 Elections, and (ii)
acknowledgment and agreement by Zhone that, because of Zhone's
election to accelerate the Designated Sale Date, the Maximum
Remarketing Obligation will equal the Buildings 1&2 Break Even Amount
under each of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement and the Other
Purchase Agreements; or
(3) any Business Day designated as such in a notice given by BNPLC to
Zhone when any Event of Default has occurred and is continuing; provided,
that if the Business Day so designated by BNPLC is not at least thirty days
after the date of such notice, the notice will be of no effect for purposes
of this definition;
(4) any Business Day designated as such in a notice given by BNPLC to
Zhone after the effective date of any termination of the Buildings 1&2 CMA
by BNPLC as provided in subparagraph 4(E) thereof or of any termination of
-----------------
the Building 3 CMA by BNPLC as provided in subparagraph 4(E) thereof; or
-------------------------
(5) any Business Day designated as such in a notice given by BNPLC to
Zhone after Zhone has given a notice exercising or attempting to exercise
any Issue 97-10 Election under (and as defined in) any of the Buildings 1&2
Operative Documents or any Issue 97-10 Election under (and as define in)
any of the Other Operative Documents.
"Development Documents" means the contracts, ordinances and other documents
described in Exhibit C attached to the Closing Certificate, as the same may be
---------
modified from time to time in accordance with the Buildings 1&2 Operative
Documents and the Other Operative Documents, and any applications, permits or
certificates concerning or affecting the use or development of the Property that
may be submitted, issued or executed from time to time as contemplated in such
contracts, ordinances and other documents or that BNPLC may hereafter execute,
approve or consent to at the request of Zhone.
"Direct Payments to Participants" means the amounts paid or required to be
paid directly to Participants on the Designated Sale Date as provided in Section
-------
6.2 of xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx at the direction of and for Zhone by
---
the collateral agent appointed pursuant to xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx
from all or any part of the Collateral described therein.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 12
"Effective Date" means August 1, 2000.
"Effective Rate" means for each Construction Period and for each Base Rent
Period, the per annum rate determined by dividing (A) LIBOR for such
Construction Period or Base Rent Period, as the case may be, by (B) one hundred
percent (100%) minus the Eurodollar Rate Reserve Percentage for such
Construction Period or Base Rent Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from Construction Period to Construction Period or from Base
Rent Period to Base Rent Period, then the Effective Rate shall be automatically
increased or decreased as of the date of such change, as the case may be,
without prior notice to Zhone. If for any reason BNPLC determines that it is
impossible or unreasonably difficult to determine the Effective Rate with
respect to a given Construction Period or Base Rent Period in accordance with
the foregoing, then the "Effective Rate" for that Construction Period or Base
Rent Period shall equal any published index or per annum interest rate
determined in good faith by BNPLC's Parent to be comparable to LIBOR at the
beginning of the first day of that period. A comparable interest rate might be,
for example, the then existing yield on short term United States Treasury
obligations (as compiled by and published in the then most recently published
United States Federal Reserve Statistical Release H.15(519) or its successor
publication), plus or minus a fixed adjustment based on BNPLC's Parent's
comparison of past eurodollar market rates to past yields on such Treasury
obligations. Any determination by BNPLC of the Effective Rate under this
definition shall, in the absence of clear and demonstrable error, be conclusive
and binding upon Zhone.
"Effective Rate/Deposit Rate Difference" means, for any Construction Period
or Base Rent Period, the difference (not less than zero) computed by subtracting
(1) the Deposit Rate for such Construction Period or Base Rent Period, from (2)
the Effective Rate for such Construction Period or Base Rent Period.
"Environmental Laws" means any and all existing and future Applicable Laws
pertaining to safety, health or the environment, or to Hazardous Substances or
Hazardous Substance Activities, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended, "CERCLA"), and the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended, "RCRA").
"Environmental Cutoff Date" means the later of the dates upon which (i) the
Buildings 1&2 Lease terminates, or (ii) Zhone surrenders possession and control
of the Property and ceases to have interest in the Land or Improvements or
rights with respect thereto under any of the Buildings 1&2 Operative Documents
or the Other Operative Documents.
"Environmental Losses" means Losses suffered or incurred by BNPLC or any
other Interested Party, directly or indirectly, relating to or arising out of,
based on or as a result of any of the following: (i) any Hazardous Substance
Activity on or prior to the Environmental Cutoff Date; (ii) any violation on or
prior to the Environmental Cutoff Date of any applicable Environmental Laws
relating to the Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or other
proceeding by or before any governmental or quasi-governmental agency or
authority in connection with any Hazardous Substance Activity that occurs or is
alleged to have occurred on or prior to the Environmental Cutoff Date; or (iv)
any claim, demand, cause of action or investigation, or any action or other
proceeding, whether meritorious or not, brought or asserted against any
Interested Party which directly or indirectly relates to, arises from, is based
on, or results from any of the matters described in clauses (i), (ii), or (iii)
of this definition or any allegation of any such matters. For purposes of
determining whether Losses constitute "Environmental Losses," as the
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 13
term is used in the Buildings 1&2 Lease, any actual or alleged Hazardous
Substance Activity or violation of Environmental Laws relating to the Property
will be presumed to have occurred prior to the Environmental Cutoff Date unless
Zhone establishes by clear and convincing evidence to the contrary that the
relevant Hazardous Substance Activity or violation of Environmental Laws did not
occur or commence prior to the Environmental Cutoff Date.
"Environmental Reports" means collectively the following reports (whether
one or more), which were provided by Zhone to BNPLC prior to the Effective Date:
(a) Phase II Site Investigation + Oakport Parcel, dated January 1991, prepared
by Baseline Environmental Consulting, Emeryville, CA; (b) Phase II Environmental
Assessment at the Edgewater Drive Property and Oakport Development Site, dated
April 16, 1993, prepared by Xxxxx & Associates, Oakland, CA; (c) Phase II
Environmental Assessment at the Edgewater Drive Property and Oakport Development
Site, Appendix E/Part 1, dated April 16, 1993, prepared by Xxxxx & Associates,
Oakland, CA; (d) Phase II Environmental Assessment at the Edgewater Drive
Property and Oakport Development Site, Appendix E/Part 2, dated April 16, 0000,
Xxxxx & Xxxxxxxxxx, Xxxxxxx, XX; (e) Geotehnical Investigation Report,
Price/Costco Wholesale Store, Oakland, CA, dated June 28, 1994, prepared by
Klienfelder; (f) Letter from the Port of Oakland to Xxxxx Xxxxxxx of the City of
Oakland, dated December 14, 1999; (g) Letter from Baseline Environmental
Consulting to Xxxxx Xxxxxxx of the City of Oakland, dated December 6, 1999; and
(h) Phase I Environmental Site Assessment for Oakport Road site, Oakland, CA.,
dated December 13, 1999.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is
a member of Zhone's controlled group, or under common control with Zhone, within
the meaning of Section 414 of the Internal Revenue Code, and the regulations
promulgated and rulings issued thereunder.
"Established Misconduct" of a Person means, and is limited to: (1) if the
Person is bound by the Buildings 1&2 Operative Documents or the Participation
Agreement, a breach by such Person of the express provisions of the Buildings
1&2 Operative Documents or the Participation Agreement, as applicable, that
continues beyond any period for cure provided therein, and (2) conduct of such
Person or its Affiliates that has been determined to constitute wilful
misconduct or Active Negligence in or as a necessary element of a final judgment
rendered against such Person by a court with jurisdiction to make such
determination. Established Misconduct of one Interested Party shall not be
attributed to a second Interested Party unless the second Interested Party is an
Affiliate of the first. Negligence which does not constitute Active Negligence
shall not in any event constitute Established Misconduct. For purposes of this
definition, "conduct of a Person" will include (1) the conduct of an employee of
that Person, but only to the extent that the employee is acting within the scope
of his employment by that Person, as determined in or as a necessary element of
a final judgment rendered against such Person by a court with jurisdiction to
make such determination, and (2) the conduct of an agent of that Person (such as
an independent environmental consultant engaged by that Person), but only to the
extent that the agent is, as determined in or as a necessary element of a final
judgment rendered against such Person by a court with jurisdiction to make such
determination, (x) acting within the scope of the authority granted to him by
such Person, (y) not acting with the consent or approval of or under the
direction of Zhone or Zhone's Affiliates, employees or agents, and (z) not
acting in good faith to mitigate Losses that such Person may suffer because of a
breach or repudiation by Zhone of the Buildings 1&2 Lease or xxx Xxxxxxxxx 0&0
Xxxxxxxx Documents.
"Eurocurrency Liabilities" shall have the meaning assigned to it in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 14
"Eurodollar Rate Reserve Percentage" means, for purposes of determining the
Effective Rate for any Construction Period or Base Rent Period, the reserve
percentage applicable two Business Days before the first day of such period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) for BNPLC's Parent with respect to liabilities or deposits
consisting of or including Eurocurrency Liabilities (or with respect to any
other category or liabilities by reference to which LIBOR is determined) having
a term comparable to such period.
"Event of Default" shall have the meaning assigned to it in subparagraph 17
---------------
of the Buildings 1&2 Lease.
"Excluded Taxes" means (1) all federal, state and local income taxes upon
Base Rent, Administrative Agency Fees, any interest paid to BNPLC or any
Participant pursuant to subparagraph 3.(j) of the Buildings 1&2 Lease, and any
------------------
additional compensation claimed by BNPLC pursuant to subparagraph 5.(b)(ii) of
----------------------
the Buildings 1&2 Lease; (2) any transfer or change of ownership taxes assessed
because of BNPLC's transfer or conveyance to any third party of any rights or
interest in the Buildings 1&2 Lease, xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement or the
Property (other than any such taxes assessed because of any Permitted Transfer
under clauses (1), (3), (5) or (6) of the definition of Permitted Transfer in
this Agreement), (3) all federal, state and local income taxes upon any amounts
paid as reimbursement for or to satisfy Losses incurred by BNPLC or any
Participant to the extent such taxes are offset by a corresponding reduction of
BNPLC's or the applicable Participant's income taxes because of BNPLC's or such
Participant's deduction of the reimbursed Losses from its taxable income or
because of any tax credits attributable thereto. If, however, a change in
Applicable Laws after the Effective Date results in an increase in such taxes
for any reason other than an increase in the applicable tax rates (e.g., a
disallowance of deductions that would otherwise be available against payments
described in clause (A) of this definition), then for purposes of the Buildings
1&2 Operative Documents, the term "Excluded Taxes" will not include the increase
in such taxes attributable to the change.
"Failed Collateral Test Date" means any Collateral Test Date upon which the
Minimum Collateral Percentage is increased as described in Part III of Schedule
--------
1 attached to xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx with the result that the
-
Minimum Collateral Percentage then exceeds the Collateral Percentage that would,
but for Section 3.3 of xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx, otherwise be in
effect thereunder.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 15
"Fed Funds Rate" means, for any period, a fluctuating interest rate
(expressed as a per annum rate and rounded upwards, if necessary, to the next
1/16 of 1%) equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by BNPLC's Parent from three Federal funds brokers of
recognized standing selected by BNPLC's Parent. All determinations of the Fed
Funds Rate by BNPLC's Parent shall, in the absence of clear and demonstrable
error, be binding and conclusive upon Zhone.
"FOCB Notice" shall have the meaning assigned to it in subparagraph 4(B)(1)
--------------------
of xxx Xxxxxxxxx 0&0 XXX.
"Funded Construction Allowance" means on any day the Outstanding
Construction Allowance on that day, including all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
that day, plus the amount of any Qualified Prepayments deducted on or prior to
that day in the calculation of such Outstanding Construction Allowance, less any
Voluntary Zhone Construction Contributions added on or prior to that day in the
calculation of such Qualified Prepayments.
"Funding Advances" means (1) the Prior Funding Advances and (2) all future
advances made by BNPLC's Parent or any other Participant to or on behalf of
BNPLC to allow BNPLC to provide the Construction Allowance.
"Future Work" shall have the meaning assigned to it in subparagraph
------------
2(C)(2)(b) of the Buildings 1&2 CMA.
----------
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in
subparagraph 13.(a) of the Buildings 1&2 Lease (except for changes with which
-------------------
Zhone's independent public accountants concur).
"Hazardous Substance" means (i) any chemical, compound, material, mixture
or substance that is now or hereafter defined or listed in, regulated under, or
otherwise classified pursuant to, any Environmental Laws as a "hazardous
substance," "hazardous material," "hazardous waste," "extremely hazardous waste
or substance," "infectious waste," "toxic substance," "toxic pollutant," or any
other formulation intended to define, list or classify substances by reason of
deleterious properties, including ignitability, corrosiveness, reactivity,
carcinogenicity, toxicity or reproductive toxicity; (ii) petroleum, any fraction
of petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic
gas usable for fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid waste
stream, and drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iii) asbestos and any asbestos containing material; and
(v) any other material that, because of its quantity, concentration or physical
or chemical characteristics, poses a significant present or potential hazard to
human health or safety or to the environment if released into the workplace or
the environment.
"Hazardous Substance Activity" means any actual, proposed or threatened
use, storage, holding, release (including any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the environment,
and the continuing migration into or through soil, surface water, groundwater or
any body of
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 16
water), discharge, deposit, placement, generation, processing, construction,
treatment, abatement, removal, disposal, disposition, handling or transportation
of any Hazardous Substance from, under, in, into or on the Property, including
the movement or migration of any Hazardous Substance from surrounding property,
surface water, groundwater or any body of water under, in, into or onto the
Property and any resulting residual Hazardous Substance contamination in, on or
under the Property. "Hazardous Substance Activity" also means any existence of
Hazardous Substances on the Property that would cause the Property or the owner
or operator thereof to be in violation of, or that would subject the Property to
any remedial obligations under, any Environmental Laws, including CERCLA and
RCRA, assuming disclosure to the applicable governmental authorities of all
relevant facts, conditions and circumstances pertaining to the Property.
"Impositions" means all sales, excise, ad valorem, gross receipts,
business, transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to the Buildings 1&2 Lease or which are imposed upon BNPLC or the
Property because of the ownership, leasing, occupancy, sale or operation of the
Property, or any part thereof or interest therein, or relating to or required to
be paid by any of the Permitted Encumbrances or the Development Documents,
excluding only Excluded Taxes. "Impositions" shall include real estate taxes
imposed because of a change of use or ownership of the Property on or prior to
the date of any sale by BNPLC pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
"Improvements" means any and all (1) buildings and other real property
improvements now or hereafter erected on the Land, and (2) equipment (e.g., HVAC
systems, elevators and plumbing fixtures) attached to the buildings or other
real property improvements, the removal of which would cause structural or other
material damage to the buildings or other real property improvements or would
materially and adversely affect the value or use of the buildings or other real
property improvements.
"Interested Party" means each of (1) BNPLC, its Affiliates and its
successors and assigns as to the Property or any part thereof or any interest
therein, (2) BNPLC's Parent, and (3) any other Participants and their permitted
successors and assigns under the Participation Agreement; provided, however,
none of the following shall constitute an Interested Party: (a) any Person to
whom BNPLC may transfer an interest in the Property by a conveyance that is not
a Permitted Transfer and others that cannot lawfully claim an interest in the
Property except through or under such a transfer by BNPLC, (b) Zhone or any
Person that cannot lawfully claim an interest in the Property except through or
under a conveyance from Zhone, or (c) any Applicable Purchaser under xxx
Xxxxxxxxx 0&0 Xxxxxxxx Agreement and any Person that cannot lawfully claim an
interest in the Property except through or under a conveyance from such
Applicable Purchaser.
"Issue 97-1 Non-performance-related Subjective Event of Default" means an
Event of Default that is unrelated to the Property or the use or maintenance
thereof and that results solely from (A) a breach by Zhone of a provision in any
Buildings 1&2 Operative Document, the occurrence of which breach cannot be
objectively determined, or (B) any other event described in subparagraph 17.(e)
-------------------
of the Buildings 1&2 Lease, the occurrence of which event cannot be objectively
determined. For example, an Event of Default under subparagraph 17.(e) of the
-------------------
Buildings 1&2 Lease resulting solely from a failure of Zhone to "generally" pay
its debts as such debts become due (in contrast to a failure of Zhone to pay
Rent to BNPLC as it becomes due under the Buildings 1&2 Lease) would constitute
an Issue 97-1 Non-performance-related Subjective Event of Default. Likewise, an
Event of Default resulting solely from a breach by Zhone of Paragraph L of Part
IV of Schedule 1 attached to the Buildings 1&2 Lease would constitute an Issue
97-1 Non-performance-related Subjective Event of Default. In no event, however,
will the term "Issue 97-1 Non-performance-related Subjective Event of Default"
include an Event of Default resulting from (1) a failure of Zhone to make any
payment required to BNPLC under the Buildings 1&2 Operative Documents or the
Other Operative Documents, (2) a breach by Zhone of the provisions
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 17
set forth in Part II of Schedule 1 attached to the Buildings 1&2 Lease (which
----------
set forth financial covenants), (3) any failure of Zhone to use, maintain and
insure the Property in accordance with the requirements of the Buildings 1&2
Lease, or (4) any failure of Zhone to pay the full amount of any Buildings 1&2
Supplemental Payment on the Designated Sale Date as required by xxx Xxxxxxxxx
0&0 Xxxxxxxx Agreement. Except as provided in subparagraph 1(A)(3) of the
--------------------
Xxxxxxxxx 0&0 Xxxxxxxx Agreement, the characterization of any Event of Default
as an Issue 97-1 Non-performance-related Subjective Event of Default will not
affect the rights or remedies available to BNPLC because of the Event of
Default.
"Issue 97-10 Election" means any of the following elections by Zhone: (1)
an election to terminate the Buildings 1&2 CMA as provided in subparagraph 4(D)
-----------------
thereof; and (2) an election to terminate the Buildings 1&2 Supplemental Payment
Obligation as provided in subparagraph 4(B) of xxx Xxxxxxxxx 0&0 Xxxxxxxx
-----------------
Agreement.
"Issue 97-10 Prepayment" means a payment to BNPLC, required by subparagraph
------------
3.(h) of the Buildings 1&2 Lease or by Paragraphs 4 of the Buildings 1&2
----- ------------
Purchase Agreement, equal in each case to (A) the Maximum Permitted Prepayment,
computed as of the date on which the payment becomes due, less (B) the accreted
value of any prior payments actually received by BNPLC from Zhone constituting
Issue 97-10 Prepayments or Voluntary Zhone Construction Contributions. For
purposes of the preceding sentence, "accreted value" of a payment shall mean the
amount of the payment plus an amount equal to the interest that would have
accrued on the payment if it bore interest at the Effective Rate.
"Land" means the land described in Exhibit A attached to the Closing
---------
Certificate, to the Buildings 1&2 Lease and Other Leases, and to xxx Xxxxxxxxx
0&0 Xxxxxxxx Agreement and Other Purchase Agreements.
"Land CDPA" means the Common Definitions and Provisions Agreement (Land),
dated as of the Effective Date between BNPLC and Zhone, as such agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"Land Lease" means the Lease Agreement (Land) dated as of the Effective
Date between BNPLC, as landlord, and Zhone, as tenant, pursuant to which Zhone
has agreed to lease BNPLC's interest in the Land, as such agreement may be
extended, supplemented, amended, restated or otherwise modified from time to
time in accordance with its terms.
"Land Purchase Agreement" means the Purchase Agreement (Land) dated as of
the Effective Date between BNPLC and Zhone, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"Land Pledge Agreement" means the Pledge Agreement (Land) dated as of the
Effective Date between BNPLC and Zhone, as such agreement may be extended,
supplemented, amended, restated or otherwise modified from time to time in
accordance with its terms.
"Landlord's Election to Continue Construction" shall have the meaning
assigned to it in subparagraph 6.(e) of xxx Xxxxxxxxx 0&0 Xxxxx.
------------------
"Last Building Base Rent Commencement Date" means the later of the Building
3 Base Rent Commencement Date, as defined in the Building 3 CDPA, or xxx
Xxxxxxxxx 0&0 Xxxx Rent Commencement Date.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 18
"LIBOR" means, for purposes of determining the Effective Rate for each
Construction Period or Base Rent Period, the rate determined by BNPLC's Parent
to be the average rate of interest per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) of the rates at which deposits of dollars are offered or
available to BNPLC's Parent in the London interbank market at approximately
11:00 a.m. (London time) on the second Business Day preceding the first day of
such period. BNPLC shall instruct BNPLC's Parent to consider deposits, for
purposes of making the determination described in the preceding sentence, that
are offered: (i) for delivery on the first day of such Construction Period or
Base Rent Period, as the case may be, (ii) in an amount equal or comparable to
the total (projected on the applicable date of determination by BNPLC's Parent)
Stipulated Loss Value on the first day of such period, and (iii) for a time
equal or comparable to the length of such period. If BNPLC's Parent so chooses,
it may determine LIBOR for any period by reference to the rate reported by the
British Banker's Association on Page 3750 of the Telerate Service at
approximately 11:00 a.m. (London time) on the second Business Day preceding the
first day of such period. If for any reason BNPLC's Parent determines that it is
impossible or unreasonably difficult to determine LIBOR with respect to a given
Construction Period or Base Rent Period in accordance with the foregoing, or if
BNPLC's Parent shall determine that it is unlawful (or any central bank or
governmental authority shall assert that it is unlawful) for BNPLC, BNPLC's
Parent or any Participant to provide or maintain Funding Advances during any
Construction Period or Base Rent Period for which Carrying Costs or Base Rent is
computed by reference to LIBOR, then "LIBOR" for that period shall equal the
Base Rate for that period. All determinations of LIBOR by BNPLC's Parent shall,
in the absence of clear and demonstrable error, be binding and conclusive upon
Zhone.
"LIBOR Period Election" for any Base Rent Period means a period of one
month, three months or six months as designated by Zhone at least five Business
Days prior to the commencement of such Base Rent Period by a notice given to
BNPLC in the form of Exhibit C attached to xxx Xxxxxxxxx 0&0 Xxxxx. (For
---------
purposes of the Buildings 1&2 Lease a LIBOR Period Election for any Base Rent
Period shall also be considered the LIBOR Period Election in effect on xxx
Xxxxxxxxx 0&0 Xxxx Rent Commencement Date or Base Rent Date upon which such Base
Rent Period begins.) Any LIBOR Period Election so designated by Zhone shall
remain in effect for the entire Base Rent Period specified in Zhone's notice to
BNPLC (provided such Base Rent Period commences at least ten Business Days after
BNPLC's receipt of the notice) and for all subsequent Base Rent Periods until a
new designation becomes effective in accordance with the provisions set forth in
this definition. Notwithstanding the foregoing, however: (1) Zhone shall not be
entitled to designate a LIBOR Period Election that would cause a Base Rent
Period to extend beyond the end of the scheduled Term; (2) changes in the LIBOR
Period Election shall become effective only upon the commencement of a new Base
Rent Period; (3) no LIBOR Period Election designated by Zhone hereunder shall be
different than the LIBOR Period Election specified under (and as defined in) the
Other Common Definitions and Provisions Agreements, and for any Base Rent Period
that ends on or prior to the Last Building Base Rent Commencement Date, the
LIBOR Period Election shall be one month; and (4) if Zhone fails to make a LIBOR
Period Election consistent with the foregoing requirements for any Base Rent
Period, or if an Event of Default shall have occurred and be continuing on the
third Business Day preceding the commencement of any Base Rent Period, the LIBOR
Period Election for such Base Rent Period shall be deemed to be one month.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, any agreement to sell receivables with recourse, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction). In addition, for purposes of subparagraph A.(8) of Part IV
------------------ -------
of Schedule 1 attached to the Buildings 1&2 Lease, "Lien" includes any Liens
----------
under ERISA relating to Unfunded Benefit Liabilities of which Zhone is required
to notify BNPLC under subparagraph 13.(a)(vii) of the Buildings 1&2 Lease
------------------------
(irrespective of whether Zhone actually notifies BNPLC as required thereunder).
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 19
"Liens Removable by BNPLC" means, and is limited to, Liens encumbering the
Property that are asserted (1) other than as contemplated in the Buildings 1&2
Operative Documents or the Other Operative Documents, by BNPLC itself, (2) by
third parties lawfully claiming through or under BNPLC (which for purposes of
the Buildings 1&2 Lease shall include any judgment liens established against the
Property because of a judgment rendered against BNPLC and shall also include any
liens established against the Property to secure past due Excluded Taxes), or
(3) by third parties lawfully claiming under a deed or other instrument duly
executed by BNPLC; provided, however, Liens Removable by BNPLC shall not include
(A) any Permitted Encumbrances or Development Documents (regardless of whether
claimed through or under BNPLC), (B) the Buildings 1&2 Operative Documents, the
Other Operative Documents or any other document executed by BNPLC with the
knowledge of (and without objection by) Zhone's counsel contemporaneously with
the execution and delivery of the Buildings 1&2 Operative Documents, (C) Liens
which are neither lawfully claimed through or under BNPLC (as described above)
nor claimed under a deed or other instrument duly executed by BNPLC, (D) Liens
claimed by Zhone or claimed through or under a conveyance made by Zhone, (E)
Liens arising because of BNPLC's compliance with Applicable Law, the Buildings
1&2 Operative Documents, the Other Operative Documents, Permitted Encumbrances,
the Development Documents or any written request made by Zhone, (F) Liens
securing the payment of property taxes or other amounts assessed against the
Property by any governmental authority, other than to secure the payment of past
due Excluded Taxes or to secure damages caused by (and attributed by any
applicable principles of comparative fault to) BNPLC's own Established
Misconduct, (G) Liens resulting from or arising in connection with any breach by
Zhone of any of the Buildings 1&2 Operative Documents or the Other Operative
Documents; or (H) Liens resulting from or arising in connection with any
Permitted Transfer that occurs more than thirty days after any Designated Sale
Date upon which, for any reason, Zhone or an Affiliate of Zhone or any
Applicable Purchaser shall not purchase BNPLC's interest in the Land and all
Improvements pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement and the Other
Purchase Agreements.
"Losses" means the following: any and all losses, liabilities, damages
(whether actual, consequential, punitive or otherwise denominated), demands,
claims, administrative or legal proceedings, actions, judgments, causes of
action, assessments, fines, penalties, costs and expenses (including Attorneys'
Fees and the fees of outside accountants and environmental consultants), of any
and every kind or character, foreseeable and unforeseeable, liquidated and
contingent, proximate and remote.
"Material Environmental Communication" means a communication between Zhone
or its agents and a regulatory agency or third party, which causes, or
potentially could cause (whether by implementation of or response to said
communication), a material change in the scope, duration, or nature of any
Remedial Work.
"Maximum Construction Allowance" means the dollar amount specified on the
cover page to the Buildings 1&2 Lease, less the Prior Funding Advances under and
as defined in this Agreement.
"Maximum Permitted Termination Fees" shall have the meaning indicated in
subparagraph 1(A)(2)(b) of the Buildings 1&2 CMA.
-----------------------
"Maximum Permitted Prepayment" as of any date means the amount equal to the
lesser of the following:
(1) eighty-nine and nine-tenths of one percent (89.9%) of the
aggregate of (i) all Project Costs paid or incurred on or prior to such
date, plus (ii) ninety-seven percent (97%) of (a) Carrying Costs
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 20
added to the Outstanding Construction Allowance on or prior to such date,
and (b) Commitment Fees reimbursed pursuant to the Buildings 1&2 CMA on or
prior to such date; or
(2) eighty-nine and nine-tenths of one percent (89.9%) of Stipulated
Loss Value on such date.
"Maximum Remarketing Obligation" shall have the meaning indicated in
subparagraph 1(A)(3) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
"Minimum Collateral Percentage" means the percentage established as such
from time to time as described in Part III of Schedule 1 attached to the
----------
Buildings 1&2 Lease and xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx.
"Minimum Extended Remarketing Price" shall have the meaning assigned to it
in subparagraph 2(B) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Multiemployer Plan" means a multiemployer plan as defined in Section 3(37)
of ERISA to which contributions have been made by Zhone or any ERISA Affiliate
during the preceding six years and which is covered by Title IV of ERISA.
"Notice of Zhone's Intent to Terminate" shall have the meaning assigned to
it in subparagraph 4(D) of the Buildings 1&2 CMA.
-----------------
"Other Common Definitions and Provisions Agreements" means the Land CDPA
and the Building 3 CDPA.
"Other Lease Agreements" means the Land Lease and the Building 3 Lease.
"Other Operative Documents" means, collectively, all documents (other than
the Closing Certificate) comprising "Building 3 Operative Documents" or "Land
Operative Documents" as described in recitals at the beginning of the Other
Common Definitions and Provisions Agreements.
"Other Purchase Agreements" means the Land Purchase Agreement and the
Building 3 Purchase Agreement.
"Outstanding Construction Allowance" shall have the meaning assigned to it
in subparagraph 6.(a) of the Buildings 1&2 Lease.
------------------
"Participant" means BNPLC's Parent and any other Person that, upon becoming
a party to the Participation Agreement and xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx by
executing supplements as contemplated therein, agrees from time to time to
participate in all or some of the risks and rewards to BNPLC of the Buildings
1&2 Lease and xxx Xxxxxxxxx 0&0 Xxxxxxxx Documents. As of the Effective Date,
the only Participant is BNPLC's Parent and Xxxxx Fargo Bank, N.A., but BNPLC may
agree after the Effective Date to share in risks and rewards of the Buildings
1&2 Lease and xxx Xxxxxxxxx 0&0 Xxxxxxxx Documents with other Participants.
However, no Person other than BNPLC's Parent and its Affiliates shall qualify as
-------
a Participant for purposes of the Buildings 1&2 Operative Documents or other
agreements concerning the Property to which Zhone is a party unless such Person,
during the continuance of an Event of Default or otherwise with Zhone's prior
written approval (which approval will not be unreasonably withheld), became a
party to xxx Xxxxxxxxx 0&0 Xxxxxx
Xxxxxx Definitions and Provisions Agreement (Improvements - Building 3) -
Page 21
Agreement and to the Participation Agreement by executing supplements to those
agreements as contemplated therein.
"Participation Agreement" means the Participation Agreement dated as of the
Effective Date between BNPLC, BNPLC's Parent and Xxxxx Fargo Bank, N.A.
(pursuant to which BNPLC's Parent and Xxxxx Fargo Bank, N.A. have agreed to
participate in the risks and rewards to BNPLC of the Buildings 1&2 Operative
Documents and the Other Operative Documents), as such Participation Agreement
may be extended, supplemented, amended, restated or otherwise modified from time
to time in accordance with its terms. It is understood, however, that the
Participation Agreement expressly makes Zhone a third party beneficiary of the
Participant's obligations thereunder to make advances to BNPLC in connection
with the Construction Advances contemplated in xxx Xxxxxxxxx 0&0 XXX and the
Building 3 CMA and with any Post-Closing Advance under the Land Lease. Thus,
Zhone's consent will be required to any amendment of the Participation Agreement
that limits or excuses such obligations. It is also understood that the
Participation Agreement (as more particularly described therein) amends,
restates and replaces a prior Participation Agreement, certain provisions of
which Zhone was a third party beneficiary, and Zhone has given its consent to
such amendment, restatement and replacement of the prior Participation
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Period" means a Construction Period or a Base Rent Period, as the context
requires.
"Permitted Encumbrances" means (i) the encumbrances and other matters
affecting the Property that are set forth in Exhibit B attached to the Closing
---------
Certificate, (ii) any easement agreement or other document affecting title to
the Property executed by BNPLC at the request of or with the consent of Zhone
(including the Other Lease Agreements, the Other Purchase Agreements and all
documents executed by BNPLC pursuant to the Other Purchase Agreements), (iii)
any ground lease executed pursuant to xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement or
the Other Purchase Agreements, (iv) any Liens securing the payment of
Impositions which are not delinquent or claimed to be delinquent or which are
being contested in accordance with subparagraph 5.(a) of the Buildings 1&2
------------------
Lease, (v) mechanics' and materialmen's liens for amounts not past due or
claimed to be past due or which are being contested in accordance with
subparagraph 11.(c) of the Buildings 1&2 Lease; and (vi) all terms and
-------------------
conditions of the Acquisition Contract or any other agreement made with the City
of Oakland in connection with or pursuant to the Acquisition Contract, to the
extent such terms and conditions survive the closing under the Acquisition
Contract and affect title to the Property.
"Permitted Hazardous Substance Use" means the use, generation, storage and
offsite disposal of Permitted Hazardous Substances in strict accordance with
applicable Environmental Laws and with due care given the nature of the
Hazardous Substances involved; provided, the scope and nature of such use,
generation, storage and disposal shall not:
(1) exceed that reasonably required for the construction of the
Construction Project in accordance with the Buildings 1&2 Lease and the
Buildings 1&2 CMA or for the operation of the Property for the purposes
expressly permitted under subparagraph 2.(a) of the Buildings 1&2 Lease; or
------------------
(2) include any disposal, discharge or other release of Hazardous
Substances from the Property in any manner that might allow such substances
to reach surface water or groundwater, except (i) through a lawful and
properly authorized discharge (A) to a publicly owned treatment works or
(B) with rainwater or storm water runoff in accordance with Applicable Laws
and any permits obtained by Zhone
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 22
that govern such runoff; or (ii) any such disposal, discharge or other
release of Hazardous Substances for which no permits are required and which
are not otherwise regulated under applicable Environmental Laws.
Further, notwithstanding anything to the contrary herein contained, Permitted
Hazardous Substance Use shall not include any use of the Property in a manner
that requires a RCRA treatment, storage or disposal permit, including a
landfill, incinerator or other waste disposal facility.
"Permitted Hazardous Substances" means Hazardous Substances used and
reasonably required for the construction of the Construction Project or for the
use of the Property by Zhone and its permitted subtenants and assigns for the
purposes expressly permitted by subparagraph 2.(a) of the Buildings 1&2 Lease,
------------------
in either case in strict compliance with all Environmental Laws and with due
care given the nature of the Hazardous Substances involved. Without limiting the
generality of the foregoing, Permitted Hazardous Substances shall include usual
and customary office, laboratory and janitorial products.
"Permitted Transfer" means any one or more of the following: (1) the
creation or conveyance by BNPLC of rights and interests in favor of any
Participant pursuant to the Participation Agreement; (2) the creation or
conveyance of rights and interests in favor of or to BNP Paribas (through its
San Xxxxxxxxx Xxxxxx or otherwise), as BNPLC's Parent, or any other Qualified
Affiliate of BNPLC, provided that Zhone must be notified before any such
conveyance to BNP Paribas or another Qualified Affiliate of (A) any interest in
the Property or any portion thereof by an assignment or other document which
will be recorded in the real property records of Alameda County, California or
(B) BNPLC's entire interest in the Land and the Property; (3) any assignment or
conveyance by BNPLC or its permitted successors or assigns to any present or
future Participant of any lien or security interest against the Property (in
contrast to a conveyance of BNPLC's fee estate in the Land and Improvements) or
of any interest in Rent, payments required by or under xxx Xxxxxxxxx 0&0
Xxxxxxxx Documents or payments to be generated from the Property after the Term,
provided that such assignment or conveyance is made expressly subject to the
rights of Zhone under the Buildings 1&2 Operative Documents and the Other
Operative Documents; (4) any agreement to exercise or refrain from exercising
rights or remedies under the Buildings 1&2 Operative Documents or under the
Other Operative Documents made by BNPLC with any present or future Participant;
(5) any assignment or conveyance by BNPLC requested by Zhone or required by any
Permitted Encumbrance, by xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement or Other Purchase
Agreements, by the Acquisition Contract or any other agreement made with the
City of Oakland in connection with or pursuant to the Acquisition Contract, by
any other Development Contract or by Applicable Laws; or (6) any assignment or
conveyance after a Designated Sale Date on which Zhone shall not have purchased
or caused an Applicable Purchaser to purchase BNPLC's interest in the Property
and, if applicable, after the expiration of the thirty day cure period specified
in subparagraph 4(C) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Person" means an individual, a corporation, a partnership, an
unincorporated organization, an association, a joint stock company, a joint
venture, a trust, an estate, a government or agency or political subdivision
thereof or other entity, whether acting in an individual, fiduciary or other
capacity.
"Personal Property" shall have the meaning assigned to it on page 2 of xxx
Xxxxxxxxx 0&0 Xxxxx.
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by Zhone or any ERISA Affiliate of
Zhone during the preceding six years and which is covered by Title IV of ERISA,
other than a Multiemployer Plan.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 23
"Pre-Commencement Casualty" shall have the meaning assigned to it in
subparagraph 1(A)(2)(a) of the Buildings 1&2 CMA.
-----------------------
"Prime Rate" means the prime interest rate or equivalent charged by BNPLC's
Parent in the United States of America as announced or published by BNPLC's
Parent from time to time, which need not be the lowest interest rate charged by
BNPLC's Parent. If for any reason BNPLC's Parent does not announce or publish a
prime rate or equivalent, the prime rate or equivalent announced or published by
either CitiBank, N.A. or any New York branch or office of Credit Commercial de
France as selected by BNPLC shall be used to compute the rate describe in the
preceding sentence. The prime rate or equivalent announced or published by such
bank need not be the lowest rate charged by it. The Prime Rate may change from
time to time after the Effective Date without notice to Zhone as of the
effective time of each change in rates described in this definition.
"Prior Funding Advances" means $12,273,585.79, which equals the advances
made prior to the Effective Date by BNPLC's Parent (directly or through one or
more of its Affiliates) or by Participants to or on behalf of BNPLC to cover the
cost of BNPLC's acquisition of the Property and other costs related to the
documents that are being amended, restated and replaced by the Building 3
Operative Documents and by the Buildings 1&2 Operative Documents. (Such amount,
when added to the Prior Funding Advances under and as defined in the Building 3
CDPA, equals $12,659,065.79, which was the outstanding balance as of the
Effective Date of "Stipulated Loss Value" under and as defined in the lease that
is being amended, restated and replaced by the Building 3 Lease and xxx
Xxxxxxxxx 0&0 Xxxxx.)
"Prior Work" shall have the meaning assigned to it in subparagraph
------------
2(C)(2)(b) of xxx Xxxxxxxxx 0&0 XXX.
----------
"Project Costs" means the following:
(a) costs incurred for the Work (as defined in the Buildings 1&2 CMA),
including not only hard costs incurred for Improvements described in
Exhibit B attached to the Buildings 1&2 CMA, but also the following costs
---------
to the extent reasonably incurred in connection with the Construction
Project:
. soft costs, such as architectural fees, engineering fees and
fees and costs paid in connection with obtaining project
permits and approvals required by governmental authorities
or the Development Documents,
. site preparation costs, and
. costs of offsite and other public improvements required as
conditions of governmental approvals for the Construction
Project or required by the Development Documents;
(b) costs incurred to maintain insurance required by (and consistent
with the requirements of) the Buildings 1&2 Lease prior to xxx Xxxxxxxxx
0&0 Xxxx Rent Commencement Date, and costs of repairing any damage to the
Improvements on the Buildings 1&2 Site by fire or other casualty prior to
xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date, to the extent such cost is
not covered by insurance proceeds made available to Zhone as provided in
the Buildings 1&2 Lease;
(c) Impositions that have accrued or become due under the Buildings
1&2 Lease prior to xxx Xxxxxxxxx 0&0 Xxxx Rent Commencement Date; and
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 24
(d) cancellation or termination fees or other compensation payable by
Zhone or BNPLC pursuant to any contract concerning the Construction Project
made by Zhone or BNPLC with any general contractor, architect, engineer or
other third party because of any election by Zhone or BNPLC to cancel or
terminate such contract.
Project Costs will include costs incurred by BNPLC to continue or complete the
Construction Project after any Landlord's Election to Continue Construction as
provided in subparagraph 6.(e) of xxx Xxxxxxxxx 0&0 Xxxxx.
-------------
Also, Project Costs includes the costs covered by Prior Funding Advances, other
than initial transaction costs that GAAP does not permit BNPLC to capitalize as
part of its investment in the Property, such as costs of preparing, negotiating
and executing the documents that are being amended, restated and replaced by the
Buildings 1&2 Operative Documents.
"Projected Cost Overruns" shall have the meaning assigned to it in
subparagraph 3(A) of the Buildings 1&2 CMA.
-----------------
"Property" means the Personal Property and the Real Property, collectively.
Except to the extent covered by the Other Lease Agreements, all rights, titles
and interests acquired by BNPLC under the Acquisition Contract are intended to
be encompassed within the term "Property" as such term is used in the Buildings
1&2 Operative Documents.
"Purchase Option" shall have the meaning assigned to it in subparagraph
------------
1(A)(1) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-------
"Qualified Affiliate" means any Person that is one hundred percent (100%)
owned, directly or indirectly, by BNP Paribas or any successor of such bank;
provided, that such Person can make (and has in writing made) the same
representations to Zhone that BNPLC has made in Paragraphs 3(E) and 3(F) of the
------------------------
Closing Certificate; and, provided, further, that such Person is not insolvent.
"Qualified Prepayments" means (A) any Issue 97-10 Prepayments received by
BNPLC, (B) any Voluntary Zhone Construction Contributions received by BNPLC
pursuant to subparagraph 3(C) of the Buildings 1&2 CMA, and (C) any payments
-----------------
received by BNPLC from time to time during the Term (1) under any property
insurance policy as a result of damage to the Property, (2) as compensation for
any restriction placed upon the use or development of the Property or for the
condemnation of the Property or any portion thereof, (3) because of any
judgment, decree or award for injury or damage to the Property, (4) under any
title insurance policy or otherwise as a result of any title defect or claimed
title defect with respect to the Property or (5) as reimbursement made by or on
behalf of Seller for costs of off-site improvements as contemplated in the
Development Documents; provided, however, that (x) in determining the amount of
"Qualified Prepayments", there shall be deducted all expenses and costs of every
kind, type and nature (including taxes, Breakage Costs and Attorneys' Fees)
incurred by BNPLC with respect to the collection or application of such
payments, (y) "Qualified Prepayments" shall not include any payment to BNPLC by
a Participant or an Affiliate of BNPLC that is made to compensate BNPLC for the
Participant's or Affiliate's share of any Losses BNPLC may incur as a result of
any of the events described in the preceding clauses (1) through (4) and (z)
"Qualified Prepayments" shall not include any payments received by BNPLC that
BNPLC has paid or is obligated to pay to Zhone for the restoration or repair of
the Property or that BNPLC is holding as Buildings 1&2 Escrowed Proceeds
pursuant to Paragraph 10 of the Buildings 1&2 Lease or any other provision of
------------
xxx Xxxxxxxxx 0&0 Xxxxx. For purposes of computing the total Qualified
Prepayments (and other amounts dependent upon Qualified Prepayments, such as
Stipulated Loss Value and the Outstanding Construction Allowance) paid to or
received by BNPLC as of any
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 25
date, payments described in the preceding clauses (1) through (4) will be
considered as Buildings 1&2 Escrowed Proceeds, not Qualified Prepayments, until
they are actually applied as Qualified Prepayments by BNPLC as provided in the
Paragraph 10 of the Buildings 1&2 Lease.
------------
"Real Property" shall have the meaning assigned to it on page 1 of xxx
Xxxxxxxxx 0&0 Xxxxx.
"Reimbursable Construction-Period Costs" shall have the meaning assigned to
it in Paragraph 2 of the Buildings 1&2 CMA.
-----------
"Remedial Work" means any investigation, monitoring, clean-up, containment,
remediation, removal, payment of response costs, or restoration work and the
preparation and implementation of any closure or other required remedial plans
that any governmental agency or political subdivision requires or approves (or
could reasonably be expected to require if it was aware of all relevant
circumstances concerning the Property), whether by judicial order or otherwise,
because of the presence of or suspected presence of Hazardous Substances in, on,
under or about the Property or because of any prior Hazardous Substance
Activity. Without limiting the generality of the foregoing, Remedial Work also
means any obligations imposed upon or undertaken by Zhone pursuant to
Development Documents or any recommendations or proposals made therein.
"Rent" means the Base Rent and all Additional Rent.
"Residual Risk Percentage" means the lowest percentage to which Zhone can
agree without causing Zhone to have to account for the Buildings 1&2 Lease as a
"capital lease" rather than an "operating lease" under GAAP because of the
impact such percentage has on the calculation of the Buildings 1&2 Supplemental
Payment under xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement. Notwithstanding the
foregoing, however, regardless of any impact it may have on the proper
accounting for the Buildings 1&2 Lease, Zhone and BNPLC agree that the Residual
Risk Percentage shall not be less than fifteen percent (15%) and shall not be
more than eighteen percent (18%).
"Responsible Financial Officer" means the chief financial officer, the
controller, the treasurer or the assistant treasurer of Zhone.
"Scope Change" shall have the meaning assigned to it in subparagraph
------------
1(A)(1)(b) of xxx Xxxxxxxxx 0&0 XXX.
----------
"Secured Spread" means forty-five basis points (45/100 of 1%) per annum.
"Seller" means the REDEVELOPMENT AGENCY OF THE CITY OF OAKLAND, a community
redevelopment agency organized and existing under the California Community
Redevelopment Law.
"Stipulated Loss Value" as of any date means the amount equal to the sum of
the Prior Funding Advances, plus the sum of all Construction Advances and
Carrying Costs added to the Outstanding Construction Allowance on or prior to
such date, minus all funds actually received by BNPLC and applied as Qualified
Prepayments on or prior to such date. Under no circumstances will any payment of
Base Rent, the Arrangement Fee, Administrative Agency Fees or Commitment Fees
reduce Stipulated Loss Value.
"Subsidiary" means, with respect to any Person, any Affiliate of which at
least a majority of the securities or other ownership interests having ordinary
voting power then exercisable for the election of
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 26
directors or other persons performing similar functions are at the time owned
directly or indirectly by such Person.
"Term" shall have the meaning assigned to it in subparagraph 1.(a) of the
------------------
Buildings 1&2 Lease.
"Third Party Contract" shall have the meaning assigned to it in
subparagraph 1(A)(2)(b) of the Buildings 1&2 CMA.
-----------------------
"Third Party Sale Notice" shall have the meaning assigned to it in
subparagraph 2(C) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Third Party Sale Proposal" shall have the meaning assigned to it in
subparagraph 2(C) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Third Party Target Price" shall have the meaning assigned to it in
subparagraph 2(C) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Unfunded Benefit Liabilities" means, with respect to any Plan or
Multiemployer Plan, the amount (if any) by which the present value of all
benefit liabilities (within the meaning of Section 4001(a)(16) of ERISA) under
the Plan or Multiemployer Plan exceeds the market value of all Plan or
Multiemployer assets allocable to such benefit liabilities, as determined on the
most recent valuation date of the Plan or Multiemployer Plan and in accordance
with the provisions of ERISA for calculating the potential liability of Zhone or
any ERISA Affiliate of Zhone under Title IV of ERISA.
"Unsecured Spread" means two hundred twenty-five basis points (225/100 of
1%) per annum.
"Voluntary Zhone Construction Contributions" shall have the meaning
assigned to it in subparagraph 3(C) of the Buildings 1&2 CMA. (As provided
-----------------
therein, in no event will payments that constitute and qualify as Voluntary
Zhone Construction Contributions exceed twenty percent of the Maximum
Construction Allowance.)
"Voluntary Retention of the Property" means an affirmative election made by
BNPLC to keep the Property pursuant to, and under the circumstances described
in, the second sentence of subparagraph 1(A)(2)(a) of xxx Xxxxxxxxx 0&0 Xxxxxxxx
-----------------------
Agreement.
"Work" shall have the meaning assigned to it in subparagraph 1(A)(2)(a) of
-----------------------
xxx Xxxxxxxxx 0&0 XXX.
"Zhone" means Zhone Technologies, Inc., a Delaware corporation.
"Zhone's Extended Remarketing Period" shall have the meaning assigned to it
in subparagraph 2(A) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Zhone's Extended Remarketing Right" shall have the meaning assigned to it
in subparagraph 2(A) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
-----------------
"Zhone's Initial Remarketing Rights" shall have the meaning assigned to it
in subparagraph 1(A)(2) of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement.
--------------------
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 27
ARTICLE II - RULES OF INTERPRETATION
The following provisions will apply to and govern the interpretation of
each of the Buildings 1&2 Operative Documents:
1. Notices. The provision of any Buildings 1&2 Operative Document, or of
any Applicable Laws with reference to the sending, mailing or delivery of any
notice or demand under any Buildings 1&2 Operative Document or with reference to
the making of any payment required under any Buildings 1&2 Operative Document,
shall be deemed to be complied with when and if the following steps are taken:
(i) All Rent and other amounts required to be paid by Zhone to BNPLC
shall be paid to BNPLC in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 000000000 BNP Paribas
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Zhone Oakland Synthetic Buildings 1&2 Lease
or at such other place and in such other manner as BNPLC may designate in a
notice to Zhone.
(ii) All Collateral required to be paid by Zhone to the Agent shall
be paid in immediately available funds by wire transfer to:
Federal Reserve Bank of New York
ABA 000000000 BNP Paribas
/BNP/ BNP San Francisco
/AC/ 14334000176
/Ref/ Zhone Collateral Payment
or at such other place and in such other manner as Agent may designate in a
notice to Zhone.
(iii) All advances paid to Zhone by BNPLC under the Buildings 1&2 CMA
or in connection therewith shall be paid to Zhone in immediately available
funds at such place and in such manner as Zhone may reasonably designate
from time to time by notice to BNPLC signed by a Responsible Financial
Officer of Zhone.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 28
(iv) All notices, demands, approvals, consents and other
communications to be made under any Buildings 1&2 Operative Document to or
by the parties thereto must, to be effective for purpose of such Buildings
1&2 Operative Document, be in writing. Notices, demands and other
communications required or permitted under any Buildings 1&2 Operative
Document are to be sent to the addresses set forth below (or in the case of
communications to Participants, at the addresses set forth in Schedule 1 to
----------
the Participation Agreement) and shall be given by any of the following
means: (A) personal service, with proof of delivery or attempted delivery
retained; (B) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by United States first class
mail, return receipt requested); or (C) registered or certified first class
mail, return receipt requested. Such addresses may be changed by notice to
the other parties given in the same manner as provided above. Any notice
or other communication sent pursuant to clause (A) or (B) hereof shall be
deemed received upon such personal service or upon dispatch by electronic
means, and, if sent pursuant to clause (C) shall be deemed received five
days following deposit in the mail.
Address of BNPLC:
----------------
BNP Leasing Corporation
00000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxx
Telecopy: (000) 000-0000
With a copy to:
--------------
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx or Xxxxxx Xxxxx
Telecopy: (000) 000-0000
And for draw requests and funding notices, with a copy to:
---------------------------------------------------------
BNP Paribas, San Francisco
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx/Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Address of Zhone:
----------------
Zhone Technologies, Inc.
Attn: Xxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 29
2. Severability. If any term or provision of any Buildings 1&2 Operative
Document or the application thereof shall to any extent be held by a court of
competent jurisdiction to be invalid and unenforceable, the remainder of such
document, or the application of such term or provision other than to the extent
to which it is invalid or unenforceable, shall not be affected thereby.
3. No Merger. There shall be no merger of the Buildings 1&2 Lease or of
the leasehold estate created by the Buildings 1&2 Lease with any other interest
in the Property by reason of the fact that the same person may acquire or hold,
directly or indirectly, the Buildings 1&2 Lease or the leasehold estate created
hereby and any other interest in the Property, unless all Persons with an
interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur. There shall be no
merger of xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement or of the purchase options or
obligations created by xxx Xxxxxxxxx 0&0 Xxxxxxxx Agreement with any other
interest in the Property by reason of the fact that the same person may acquire
or hold, directly or indirectly, the Buildings 1&2 Lease or the leasehold estate
created hereby and any other interest in the Property, unless all Persons with
an interest in the Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur.
4. No Implied Waiver. The failure of BNPLC or Zhone to insist at any time
upon the strict performance of any covenant or agreement or to exercise any
option, right, power or remedy contained in any Buildings 1&2 Operative Document
shall not be construed as a waiver or a relinquishment thereof for the future.
The failure of Agent to insist at any time upon the strict performance of any
covenant or agreement or to exercise any option, right, power or remedy
contained in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx shall not be construed as a
waiver or a relinquishment thereof for the future. The waiver of or redress for
any breach of any Buildings 1&2 Operative Document by any party thereto shall
not prevent a similar subsequent act from constituting a violation. Any express
waiver of any provision of any Buildings 1&2 Operative Document shall affect
only the term or condition specified in such waiver and only for the time and in
the manner specifically stated therein. No waiver by any party to any Buildings
1&2 Operative Document of any provision therein shall be deemed to have been
made unless expressed in writing and signed by the party to be bound by the
waiver. A receipt by BNPLC of any Rent with knowledge of the breach by Zhone of
any covenant or agreement contained in the Buildings 1&2 Lease or any other
Buildings 1&2 Operative Document shall not be deemed a waiver of such breach. A
receipt by Agent of any Collateral or other payment under xxx Xxxxxxxxx 0&0
Xxxxxx Xxxxxxxxx with knowledge of the breach by Zhone of any covenant or
agreement contained in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx shall not be deemed a
waiver of such breach.
5. Entire and Only Agreements. The Buildings 1&2 Operative Documents
supersede any prior negotiations and agreements between BNPLC, Agent and Zhone
concerning the Property or the Collateral, and no amendment or modification of
any Buildings 1&2 Operative Document shall be binding or valid unless expressed
in a writing executed by all parties to such Buildings 1&2 Operative Document.
6. Binding Effect. Except to the extent, if any, expressly provided
to the contrary in any Buildings 1&2 Operative Document with respect to
assignments thereof, all of the covenants, agreements, terms and conditions to
be observed and performed by the parties to the Buildings 1&2 Operative
Documents shall be applicable to and binding upon their respective successors
and, to the extent assignment is permitted thereunder, their respective assigns.
7. Time is of the Essence. Time is of the essence as to all
obligations of Zhone and BNPLC and all notices required of Zhone and BNPLC under
the Buildings 1&2 Operative Documents.
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 30
8. Governing Law. Each Buildings 1&2 Operative Document shall be
governed by and construed in accordance with the laws of the State of California
without regard to conflict or choice of laws (subject, however, in the case of
xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx to any contrary provisions of the "UCC," as
defined in xxx Xxxxxxxxx 0&0 Xxxxxx Xxxxxxxxx).
9. Paragraph Headings. The paragraph and section headings contained
in the Buildings 1&2 Operative Documents are for convenience only and shall in
no way enlarge or limit the scope or meaning of the various and several
provisions thereof.
10. Negotiated Documents. All the parties to each Buildings 1&2
Operative Document and their counsel have reviewed and revised or requested
revisions to such Buildings 1&2 Operative Document, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party
shall not apply to the construction or interpretation of any Buildings 1&2
Operative Documents or any amendments thereof.
11. Terms Not Expressly Defined in a Buildings 1&2 Operative
Document. As used in any Buildings 1&2 Operative Document, a capitalized term
that is not defined therein or in this Buildings 1&2 CDPA, but that is defined
in another Buildings 1&2 Operative Document, shall have the meaning ascribed to
it in the other Buildings 1&2 Operative Document. Further, as used in any
Buildings 1&2 Operative Document, a capitalized term that is not defined therein
or in this Buildings 1&2 CDPA or in another Buildings 1&2 Operative Document,
but that is defined in any of the Other Operative Documents, shall have the
meaning ascribed to it in the Other Operative Documents. But if the meaning
given any such capitalized term in one of the Other Operative Documents is
different than the meaning assigned to it another of the Other Operative
Documents, the term will be construed broadly for purposes of the Buildings 1&2
Operative Documents to include anything that would fall within one or more of
the definitions of the term in the Other Operative Documents.
12. Other Terms and References. Words of any gender used in each
Buildings 1&2 Operative Document shall be held and construed to include any
other gender, and words in the singular number shall be held to include the
plural and vice versa, unless the context otherwise requires. References in any
Buildings 1&2 Operative Document to Paragraphs, subparagraphs, Sections,
subsections or other subdivisions shall refer to the corresponding Paragraphs,
subparagraphs, Sections, subsections or subdivisions of that Buildings 1&2
Operative Document, unless specific reference is made to another document or
instrument. References in any Buildings 1&2 Operative Document to any Schedule
or Exhibit shall refer to the corresponding Schedule or Exhibit attached to that
Buildings 1&2 Operative Document, which shall be made a part thereof by such
reference. All capitalized terms used in each Buildings 1&2 Operative Document
which refer to other documents shall be deemed to refer to such other documents
as they may be renewed, extended, supplemented, amended or otherwise modified
from time to time, provided such documents are not renewed, extended or modified
in breach of any provision contained in the Buildings 1&2 Operative Documents
or, in the case of any other document to which BNPLC is a party or of which
BNPLC is an intended beneficiary, without the consent of BNPLC. All accounting
terms used but not specifically defined in any Buildings 1&2 Operative Document
shall be construed in accordance with GAAP. The words "this [Agreement]",
"herein", "hereof", "hereby", "hereunder" and words of similar import when used
in each Buildings 1&2 Operative Document refer to that Buildings 1&2 Operative
Document as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this Paragraph", "this subparagraph", "this Section",
"this subsection" and similar phrases used in any Buildings 1&2 Operative
Document refer only to the Paragraph, subparagraph, Section, subsection or other
subdivision described in which the phrase occurs. As used in the Buildings 1&2
Operative Documents
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 31
the word "or" is not exclusive. As used in the Buildings 1&2 Operative
Documents, the words "include", "including" and similar terms shall be construed
as if followed by "without limitation to".
13. Execution in Counterparts. To facilitate execution, each
Buildings 1&2 Operative Document may be executed in as many identical
counterparts as may be required. It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required
to bind any party, appear on each counterpart. All counterparts, taken together,
shall collectively constitute a single instrument. It shall not be necessary in
making proof of any Buildings 1&2 Operative Document to produce or account for
more than a single counterpart containing the respective signatures of, or on
behalf of, each of the parties hereto. Any signature page to any counterpart may
be detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
14. Not a Partnership, Etc. NOTHING IN ANY BUILDINGS 1&2 OPERATIVE
DOCUMENT IS INTENDED TO CREATE ANY PARTNERSHIP, JOINT VENTURE, OR OTHER JOINT
ENTERPRISE BETWEEN BNPLC AND ZHONE. NEITHER THE EXECUTION OF ANY BUILDINGS 1&2
OPERATIVE DOCUMENT NOR THE ADMINISTRATION THEREOF OR OTHER DOCUMENTS REFERENCED
HEREIN BY BNPLC, NOR ANY OTHER RIGHT, DUTY OR OBLIGATION OF BNPLC UNDER OR
PURSUANT TO ANY BUILDINGS 1&2 OPERATIVE DOCUMENT IS INTENDED TO BE OR TO CREATE
ANY FIDUCIARY OBLIGATIONS OF BNPLC TO ZHONE.
15. Amendment and Restatement. Together, this Buildings 1&2 CDPA and
the Building 3 CDPA amend, restate and replace the Prior Common Definitions and
Provisions Agreement referenced in the recitals at the beginning of this
agreement.
[The signature pages follows.]
Common Definitions and Provisions Agreement (Improvements - Building 3) -
Page 32
IN WITNESS WHEREOF, Zhone and BNPLC have caused this Common Definitions
and Provisions Agreement (Improvements - Buildings 1&2) to be executed as of
August 1, 2000.
"Zhone"
ZHONE TECHNOLOGIES, INC.
By: _______________________________
Name:__________________________
Title:_________________________
[Continuation of signature pages to the Common Definitions and Provisions
Agreement (Improvements - Buildings 1&2) dated to be effective as of August 1,
2000]
"BNPLC"
BNP LEASING CORPORATION
By: ___________________________________
Xxxxx X. Xxx, Vice President
